Thursday July 6 2019, Weekly News Digest

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News Comments Today’s main news: 3 top execs exit SoFi. Zopa proclaims end of monogamous banking. LendInvest earnings hit the roof. Financial Conduct Authority sets new rules for UK P2P lending. Quarter of global small firms are significant fintech users. Biz2Credit raises $52M. Today’s main analysis: Alternative lenders steal business from banks. P2P lending will be […]

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United Kingdom

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News Summary

United States

SoFi Loses Three Top Executives (WSJ), Rated: AAA

Three top executives of Social Finance Inc. are leaving the financial-tech startup in the coming weeks, adding to the challenges the company faces as it moves through a tough environment for online lenders.

Marketing chief Joanne Bradford, head of risk Kevin Moss and Ashish Jain, the lender’s top capital markets executive, recently told Chief Executive Anthony Noto about their plans to step down from their roles. All three had been at the company prior to Mr. Noto taking the reins in early 2018.

Tech Driving Bank Earnings Growth (PeerIQ), Rated: AAA

US first quarter GDP growth was revised lower to 3.1%. There is fear that the economy is slowing due to the ongoing trade war and the length of this economic expansion. The 3 month-10 year yield curve fell to its most inverted since 2007 to -12.3 bps. Recessions have usually followed within 18 months of this curve inverting. The market is looking to the Fed to bolster economic growth with the odds of a rate cut at the September meeting now at 54%.

Source: CME, PeerIQ

Technology Driving Earnings Growth

Banks and lenders are reaping the benefits of their technology investments now. Banks like Citi have been able to offer new products and grow their deposit base, while Capital One has improved its efficiency ratio by 400 bps. Banks and lenders continue to make large technology investments for faster growth at lower cost.

Alternative Lenders Continue to Steal Business From Banks (The Financial Brand), Rated: AAA

What is less well known is the rapid growth of PayPal as a digital lending alternative. It may be time for banks and credit unions to wake up, however, as the company announced that they had crossed $10 billion in small business lending in only 5 years.

Amazon Joins PayPal as Top 5 Small Business Digital Lender

Amazon has joined PayPal, OnDeck, Kabbage, and Square as a top 5 digital small business lender. In fact, Amazon revealed that it had made more than $1 billion in small business loans to US-based merchants in 2018.

The peer-to-peer business lender, Funding Circle, also revealed its first-quarter trading update, showing that loans under management rose by 44% compared to the first quarter of 2018, while originations grew by 23% (they have originated $9.5 billion in loans).

Consumer Financial Protection Bureau Releases Rules for Comprehensive Reform of Debt Collection Industry (Debevoise & Plimpton), Rated: AAA

On May 7, the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) released a Notice of Proposed Rulemaking (“NPRM” or “Notice”) to increase regulation of the debt collection industry.1 The much-anticipated Notice is the outgrowth of the CFPB’s 2016 Outline of Proposals (the “Outline” or the “2016 Outline”), which was a cornerstone of the Obama Administration’s efforts to protect consumers and overhaul all aspects of consumer finance (see our August 10, 2016 client alert on the Outline here). One presidential election and two CFPB Directors later, CFPB Director Kathleen Kraninger announced a more limited plan to put in place substantial protections, but which rejects some of the 2016 Outline’s more ambitious proposals. The NPRM would overhaul the industry by, for example, requiring that debt collectors make no more than seven attempts by telephone per week to reach consumers about specific debts, and allow debtors to opt out of allowing collectors to contact them via e-mail, text messages, or other media. However, the proposal fails to address many of the Outline’s calls for increased regulation of substantiation of debt, decedent debt, and transfer of information to subsequent collectors (among other things).

See the full report here.

Biz2Credit Raises $ 52M In Funding To Expand (PYMNTS), Rated: AAA

Biz2Credit, the online lending platform that helps banks and other financial institutions manage small and medium-sized business (SMB) lending processes, announced Tuesday (June 4) that it raised $52 million in venture funding.

Biz2Credit said the Series B funding round was led by WestBridge Capital.

Jared Kaplan of OppLoans (Lend Academy), Rated: A

The next guest on the Lend Academy Podcast is Jared Kaplan, the CEO of OppLoans.

Lighter Capital Introduces Suite of Alternative Financing Solutions to Fund More Startups up to $ 3 Million (Yahoo! Finance), Rated: A

Lighter Capital announced today that it has launched new financing products to better match the capital needs of growing startups. To date, Lighter Capital has provided over $150 million in more than 500 rounds of financing to over 300 startups. The company has historically provided Revenue-Based Financing and has now broadened its portfolio to include lines of credit and term loans, designed to provide startups capital over time as they need it. Unlike most venture debt, startups do not need to have raised Venture Capital to qualify for funding.

1. Lighter Line of Credit – Startups have fluctuations in capital needs, to make essential payments like payroll or wait for a big customer payment. The Lighter Line of Credit is a revolving working capital line. It enables startups to draw and return capital numerous times, to even out their cash needs.

2. Lighter Term Loan – Provides startups growth capital in a traditional structure with predictable payments. Lighter Capital will also make forward commitments, giving startups the right to get additional capital for a period of time. For example, a startup could get a $500,000 loan today and a commitment from Lighter Capital to provide an additional $500,000 over the following six months.

LendPro Unveils Dynamic Routing Capability to Streamline POS Financing (LendPro Email), Rated: A

LendPro LLC, a provider of Lending-As-A-Service (LaaS) products and platforms for retailers, today unveiled Dynamic Routing —an innovative POS financing solution that automatically matches consumer credit applications with the best-available lending option.

While alternative lending software moves credit applications through a pre-defined, inflexible process, Dynamic Routing by LendPro dynamically guides borrower application data to lenders in the merchant’s financing portfolio based on the attributes of the sale. For example, if the total price for a specific purchase is too large (or small) for a lender’s target loan size, LendPro’s Dynamic Routing system can route the applicant to a different lender. This technological innovation saves time, increases simplicity, and may help the borrower avoid an unwanted credit application.

Why it’s Time to Ask Your Wealth Manager About P2P Lending (Crowdfund Insider), Rated: A

Using a crowdfunding platform, however, 5,000 individuals might each invest $1,000 into the company. Each of those individual investors is exposed to a very small amount of risk, and the company is able to raise the funds without surrendering ownership.

Possible Finance lands $ 10.5 million to provide consumers softer, kinder short-term loans (TechCrunch), Rated: A

It’s one reason that venture capitalist Rebecca Lynn, a managing partner with Canvas Ventures  and an early investor in the online lending company LendingClub, has largely steered clear of the numerous startups crowding into the industry in recent years. It’s also why she just led a $10.5 million investment in Possible Finance, a two-year-old, Seattle-based outfit that’s doing what she “thought was impossible,” she says. The startup is “helping people on the lower end of the credit spectrum improve their financial outlook without being predatory.”

Santa Clarita Ranked Second Highest ‘Debt-Ridden’ City In California (Home Town Station), Rated: A

LendingTree, an online loan marketplace, released a report this week detailing the accrued debt of all California cities with a population of at least 50,000.

Santa Clarita ranked the second highest in auto loan debt with an average of about $21,000, and second in the state for personal loan debt, excluding mortgages, with an average of just over $6,000.

Source: Home Town Station

Cities With the Highest Percentage of Black Homeowners (Black Enterprise), Rated: A

Even though housing discrimination has been outlawed for 50 years, studies show that the U.S. black homeownership rate isn’t any higher than when the Fair Housing Act initially passed in 1968. In fact, the racial gap between white and black homeowners today is significant. According to the U.S. Census Bureau, the homeownership rate among white Americans is 73.2%, while the black homeownership rate stands at 41.1%. In comparison, 42% of black households owned their homes back in 1970, two years after housing discrimination based on race, color, religion, and national origin was outlawed.

According to the report, the U.S. cities that have the highest percentage of black homeowners are San Jose, Los Angeles, Salt Lake City, San Antonio, and Portland. On the other hand, the cities where black homeownership is lowest relative to overall population are Memphis, New Orleans, Baltimore, Virginia Beach, and Milwaukee, where the median household income for black residents is a mere $28,928.

See LendingTree’s report here.

Real Crowd Says HNW Investors Poised to Boost Real Estate Investments in 2019 (Crowdfund Insider), Rated: A

Real estate crowdfunding platform RealCrowd reports that High Net Worth (HNW) investors are looking to increase their portfolio of real estate investments during 2019. According to a survey by the Fintech platform, 53% of surveyed HNW individuals expect to make “two-to-four direct real estate investments in 2019.” Specific details on the survey process were not revealed.

This is a big improvement over year prior when just 33% planned to do the same thus an increase of around 20%.

The survey also stated that 47% of respondents’ desire to allocate more than 25 percent of their investment portfolio to commercial real estate.

WealthStone – Democratizing Access to Commercial Real Estate (PR Newswire), Rated: A

WealthStone LLC announces the launch of its new website, WealthStoneLLC.com, where technology brings increased access to institutional-quality commercial real estate investments to a wider audience, while delivering the best customer experience possible for its growing global investor base.

3 Investments That Lead to Passive Income (Realty Biz News), Rated: B

Peer-to-peer lending is a relative newcomer to the world of investments. Lending Club and Prosper were the first institutions to offer P2P loans beginning in mid-2000, and they’ve changed the way countless loans are handled. Instead of going to the bank, borrowers apply for loans from other people. People who have been denied loans from financial institutions are often approved for P2P loans at rates that are lower than those of larger financial institutions.

Sagent Lending Technologies to Transform the Lending Experience, Powered by Microsoft Azure (BusinessWire), Rated: A

Sagent Lending Technologies announced today a strategic initiative to transform the borrower and the lender experience through Microsoft Azure. Sagent will leverage the potential of artificial intelligence, machine learning, data science, and cognitive services available on Azure that will provide a reimagined experience for Sagent clients and their consumer borrowers.

BofA, Longtime Leader in Leveraged Loans, Warns of `Carnage’ (Bloomberg), Rated: A

The U.S. economy is on solid footing except for one potential trouble spot, according to Bank of America Corp.’sChief Executive Officer Brian Moynihan: leveraged loans — a business the bank has dominated for a decade.

Bank of America was bookrunner on some $317 billion of leveraged loans this year, accounting for 10.8 percent of the market share, the Bloomberg data show, which captures all leveraged term loans and revolver facilities that are either new or have been amended.

Moody’s Investors Service said covenant quality for 2018’s last quarter was close to a record low, and the rating company sees no signs of improvement this year. Federal Reserve Chairman Jerome Powell said last month that the market looks a lot like the mortgage industry in the run-up to the subprime crisis.

Digital Banks Look to Attract Older Generations (LendIt), Rated: A

One of the challenges for the challenger banks like Monzo, Starling and Revolut is to go beyond the young demographic they’ve been successful at attracting to their products; not surprisingly, less than 5% of Monzo’s customers over 60; as more bank branch close they are looking to bring in older customers who are no longer being served by traditional banks; Monzo and Starling have both added the ability to make cash deposits; Starling recently partnered with the post office and Monzo partnered with a payments service which is in 30,000 shops in the UK; these digital banks and their competitors are experimenting in how they can have more physical points of contact with customers; Revolut recently shared a plain English customer contract in a move to help their customers better understand the product.

The tech banks are using to boost deposit growth (American Banker), Rated: A

First Arkansas & Trust, for example, is using Plinqit, a goal-oriented savings app from a fintech called HTMA Holdings, in the hopes of boosting deposits.

And some banks have begun to specialize in the banking-as-a-service model to increase deposits.

Following is a look at how regional and community banks are employing tech to help in the race for deposit growth:

Wharton just released an online fintech course for the masses (Technical.ly), Rated: A

On Thursday, the University of Pennsylvania’s Wharton Online announced its new virtual fintech specialization program, “FinTech: Foundations and Applications of Financial Technologies,” for students and professionals who want to learn about the rapidly changing tech.

The four-course financial program is available via online education platform Coursera, and will detail the use of cryptocurrency, robo-advising, crowdfunding and modern investing.

BlueVine Appoints Silicon Valley Veteran Herman Man to Chief Product Officer (BlueVine), Rated: B

BlueVine, which provides small- and medium-sized businesses with access to fast and simple online financing, announced today that it has named Silicon Valley technology and engineering veteran, Herman Man, its Chief Product Officer. In this role, Man will focus on developing the next generation of BlueVine products and oversee the company’s product vision, strategy, design and execution to deliver on its mission to provide fast, fair and easy financing solutions every small business needs to thrive.

Lendio Announces New Senior Vice President of Lender & Partner Strategy (Lendio), Rated: B

Lendio announced today that Denada Ramnishta has been promoted to Senior Vice President of Lender & Partner Strategy.

Thomas M. Affolter Joins White Oak as Managing Director to Bolster Origination Efforts (Yahoo! Finance), Rated: B

White Oak Global Advisors, LLC (White Oak) is pleased to announce that Thomas (Tom) M. Affolter has joined White Oak as a Managing Director based in Chicago. Mr. Affolter will focus on originating new investment opportunities and expanding the coverage network for White Oak’s private debt funds.

United Kingdom

Zopa says fintech revolution has killed off monogamous banking (P2P Finance News), Rated: AAA

ZOPA has declared that “monogamous banking is a thing of the past”, as new research reveals that the average UK adult has a relationship with seven different financial providers.

The peer-to-peer consumer lender, which is launching a digital bank, said that the fintech revolution has changed the shape of financial services for consumers.

It cited a survey that found 71 per cent of UK adults said they do not need a relationship with their main bank, while two thirds are actively using products from banks and financial providers other than their main current account provider.

LendInvest earnings soar as it looks to disrupt ‘slow moving’ banks (P2P Finance News), Rated: AAA

ONLINE property lender LendInvest has reported an 82 per cent jump in core earnings, as it looks to disrupt the UK mortgage market.

LendInvest, which used to be a peer-to-peer lender before it shut its platform to retail investors, posted core earnings of £4m for the year ended 31 March 2019, up from £2.2m the previous year.

The firm, which is considering a stock market flotation, said that platform assets rose by 69 per cent to £788.3m over the same period, while revenue rose by 36 per cent to £72.7m.

FCA Announces New Rules For UK P2P Lending Platforms (Lend Academy), Rated: AAA

The long awaited changes to P2P lending regulations in the UK are finally here. Today, the Financial Conduct Authority (FCA) announced that the new rules for peer to peer lending platforms have been set and will come into effect on December 9, 2019.

  • Introducing more explicit requirements to clarify what governance arrangements, systems and controls platforms need to have in place to support the outcomes they advertise. These new rules focus particularly on credit risk assessment, risk management and fair valuation practices, especially for platforms with more complex business models.
  • Strengthening rules on plans for the wind-down of P2P platforms.
  • Applying marketing restrictions to P2P platforms, designed to protect new or less experienced investors. We have also clarified the practical implication of these new rules as they apply to P2P agreements.
  • Introducing a requirement that an appropriateness assessment (to assess an investor’s knowledge and experience of P2P investments) be undertaken, where no advice has been given to the investor. We have also provided guidance on what the assessment should include.
  • Setting out the minimum information that P2P platforms need to provide to investors

Assetz Capital hits bridging loans and small business lending milestones (AltFi), Rated: A

Peer-to-peer lender Assetz Capital said it has hit a double milestone, providing over £100m in bridging loans and a further £50m in small business funding, “as the appetite for alternative forms of finance continues to rise across the UK”.

The Manchester-based fintech adds that since it was founded six years ago it has lent over £780m to small firms and property developers, helping build 3,700 homes in Britain.

UK P2P sector poised for “significant further growth” (P2P Finance News), Rated: A

THE UK’S peer-to-peer lending sector is set to experience “significant further growth”, according to Standard & Poor’s.

A report released by the ratings agency this week said that the growing involvement of institutional funds and increased securitisation issuance are set to boost the industry.

Santander and eBay team up on UK loans app (Techradar), Rated: A

In an effort to fend off tech giants and newer digital rivals, Santander and eBay have announced a new lending partnership for small businesses.

The Spanish bank will begin offering loans to over 200,000 small and medium-sized businesses that sell products on eBay in the UK through its financial technology app Astro.

As £165m Lendy collapses, experts warn ‘a dozen more peer-to-peer firms will follow’ (The Telegraph), Rated: A

While investments of varying risk are available, some platforms have tempted consumers with returns of more than 12pc on high-risk projects. But the collapse of one large platform, Lendy, which offered loans on property developments, has concerned investors across the sector.

Wagestream Says One Complaint Against PayDay Lenders is Resolved for Every Three Received (Crowdfund Insider), Rated: A

Payday loan alternative Wagestream has issued a release stating the Financial Ombudsman Service (FOS) has received 47,220 complaints against payday lenders since 2018. Yet while many complaints have been received only a fraction have been resolved. Wagestream states that only one out of three are resolved or just under 17,000.

Welendus unveils rebrand as Fund Ourselves (P2P Finance News), Rated: B

WELENDUS, the peer-to-peer payday lender, has rebranded as Fund Ourselves.

ARBUTHNOT SPECIALIST FINANCE CONCLUDES FIRST LOAN COMPLETION SINCE LAUNCHING THE BUSINESS (Arbuthnot Latham), Rated: B

Arbuthnot Specialist Finance (ASFL) is pleased to announce it has concluded its first loan completion since announcing its launch in late May. The deal is a 70% LTV residential product loan on a property located less than half a mile from the University of Central Lancashire campus in Preston.

China/Hong Kong

The Escalating US-China Trade War, Part 1 (In Homeland Security), Rated: AAA

China is in debt, significantly. Part of the problem is that it is difficult, if not impossible, to assign a figure to the debt. There are Chinese statistics for official debt, but following the 2008 economic crisis, China implemented new restrictions on lending. Over the past decade, those restrictions have shifted from one type of loan to another so Chinese citizens get creative with how they borrow money for business purposes or to purchase property.

Furthermore, the economic crisis took “shadow lending” to new heights. Shadow lending can include everything from organized crime to banks obfuscating the purpose of a loan or peer-to-peer lending. China cracked down on this lending practice too, but the debt amount is significant and official numbers do not typically include shadow lending.

New US Tariffs Spell Doomsday for China’s Economy (The Epoch Times), Rated: AAA

The additional 25 percent tariff imposed by the United States on $200 billion worth of Chinese goods will trigger a new round of factory closures in China, driving economic collapse.

In the context of the blow-up of the P2P (peer-to-peer lending) and other usury, the 8.4 trillion will cause most medium and small-sized banks to fall into bankruptcy crisis.

HSBC Rolls Out Digital Wallet To Hong Kong Businesses (PYMNTS), Rated: A

HSBC has reportedly expanded its PayMe digital wallet to startups and small businesses, marking its first foray into the business payments marketplace.

European Union

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

ING is keen to maximise the possibilities of open banking and is working with Yolt and Funding Options on bringing new features to customers across Europe.

Firstly, ING is launching a marketplace for SME financing in the Netherlands, which will open to other external financing providers, becoming the first Dutch bank in doing so.

International

We are “very close” to peak fintech, with more than 10,000 startups jumping into the boom (Quartz), Rated: AAA

According to Curve’s Shachar Bialick, the founder and CEO, an app that lets customers to link all their credit and debit cards to just one card, says there are more than 10,000 fintech startups around the world, and even he can’t keep track of them all. Some, or even most, aren’t going to make it.

Quartz: It’s been about four months since Amex blocked Curve. What are your plans now?

Bialick: Amex was never a critical part of Curve. It was always an opportunity to solve a big problem Amex has in the UK and Europe, which is access.

Curve has continued to grow in Europe without Amex.

Have we reached the peak in terms of new fintech startups?

I don’t know if we reached the peak, but we definitely are very close, because today there are over 10,000 fintechs globally. I don’t know over 90% of them.

Peer To Peer Lending To Be The Next $ 1 Trillion Industry (ValueWalk), Rated: AAA

By eliminating the need for banks, peer to peer lending allows investors to invest in individual and company debt with 5-10% returns – a far cry from the the lowly 1.5% that you’ll received in a regular CD account.

And it works better for borrowers too. Borrowers are able to take out loans with greater ease and lower interest rates, typically offered in the region of 3-4%.

The average default rate at Lending Works is only 3.2% over the last six years. And many P2P lenders allow you to choose secured loans for additional protection.

Transparency Market Research estimates the industry be worth $900 billion by the end of 2024, with an annual growth rate of 48%, up from $26 billion in 2015.

Source: ValueWalk

One quarter of world’s small firms are ‘significant’ fintech users, says report (AltFi), Rated: AAA

Fintechs are becoming the ‘new normal’ in financial services, said a survey by professional services firm EY.

Fintech adoption is by far the highest in China, where 61 per cent of small businesses use their services, followed by the US, 23 per cent, the UK, 18 per cent, South Africa, 16 per cent, Mexico, 11 per cent, with the average set at 25 per cent.

Source: Ernst & Young

See the full report here.

Tencent, Temasek Invest $ 35 Million in U.K. Open-Banking Startup (Bloomberg), Rated: A

Chinese technology giant Tencent Holdings Ltd. and Singapore government-owned fund Temasek is to invest $35 million in London-based TrueLayer.

The Fintech Bubble Floats Toward a $ 64 Billion Pin (The Washington Post), Rated: A

Trendy U.S. online payments company Stripe, worth some $22.5 billion according to private-market valuations, is joining Amazon.com Inc. and Apple Inc. in warning about the impact of EU rules aimed at getting customers to double-check payments going out from their accounts.

Adyen trades at a gob-smacking 110 times this year’s earnings, with a market value of 20.8 billion euros. That’s almost twice the worth of Deutsche Bank AG, even though the Dutch fintech only employs the equivalent of 1% of the German lender’s staff. Stripe is the sixth most expensive private company in the world, according to researchers at CBInsights.

Australia

RBA Boss Warns Banks On Undermining The Economy (SB Dirty South Soccer), Rated: A

THE Reserve Bank of Australia (RBA) has cut the cash rate to a new record low.

The online lender announced a new headline variable rate for owner-occupiers at 3.34 percent.

Authors:

George Popescu
Allen Taylor

The post Thursday July 6 2019, Weekly News Digest appeared first on Lending Times.

Thursday April 18 2019, Weekly News Digest

digital banking

News Comments Today’s main news: Funding Circle sets new high on loans under management. SoFi partners with Lemonade, Root. Salary Finance hires SoFi co-founder, raises $32.8M. Dianrong to raise $100M. Klarna may be headed to the stock market. Linked Finance sees record quarter. Today’s main analysis: European online alternative finance grows 36%. (A MUST-READ REPORT […]

The post Thursday April 18 2019, Weekly News Digest appeared first on Lending Times.

digital banking

News Comments

United States

United Kingdom

European Union

China

Other

News Summary

United States

SoFi has announced two new partnerships in the insurance space. The partnerships expand SoFi’s portfolio of offerings to include homeowners’ and renters’ insurance through Lemonade and auto insurance through Root.

LendIt Fintech USA 2019 Slide Presentations Now Live (LendIt Fintech), Rated: AAA

Keynote Presentations

Advancements in Credit, Underwriting and Identity

Small Business Lending Innovation

Niche Lending: Looking for Yield

Are Crypto-Tracking Stocks Viable Alternatives to a Bitcoin ETF? (Finance Magnates), Rated: AAA

As the world continues to wait for the US SEC’s decision on the Bitcoin ETF applications that are still being processed months after a decision was expected, some investors may find themselves seeking alternative methods of entering into the Bitcoin market without actually having to do the dirty deed of investing in Bitcoin itself.

Crypto lending serviceshave recently reported record profits; crypto futures exchanges are also reporting higher-than-ever trading volumes.

Source: @CMEGroup on Twitter

Nearly 1 in 4 Millennial Homebuyers Want to Buy a Home Before They’re Married (LendingTree), Rated: AAA

Young adults are getting married later than previous generations. In 1980, the median age for men and women at their first marriage was 24.7 and 22, respectively. In 2018, the ages increased to 29.8 and 27.8, for men and women, respectively.

Millennials make up the largest share of homebuyers at 37%, according to a report from the National Association of Realtors.

Nearly a quarter (24%) of millennial first-time homebuyers want to own a home before getting married.

On the flip side, this means just over 3 in 4 millennial buyers (76%) want a marriage before a mortgage. Additionally, 27% of millennial buyers are postponing parenthood until they’ve achieved homeownership. Among homebuyers of all ages, nearly 2 in 5 are waiting to get a pet until after purchasing a house.

More than a quarter (26%) of first-time buyers have poor credit.

Just 15% of first-time buyers have a score of 740 or higher. Nearly 2 in 5 (38%) aren’t satisfied with their credit score, yet more than a quarter of those who are dissatisfied haven’t taken steps to improve their score. By contrast, more than 70% of repeat homebuyers are satisfied with their credit score.

GROUNDFLOOR Doubles Year Over Year Revenue (PR Newswire), Rated: A

GROUNDFLOOR, an investing and lending platform that allows anyone to invest fractionally in real estate, is today announcing its Q1 results and momentum. Despite the government shutdown of the U.S. Securities and Exchange Commission for 35 days, GROUNDFLOOR still experienced 123% percent non-GAAP Q1 revenue growth compared to the prior year Q1.

Additional Q1 momentum for GROUNDFLOOR includes:

  • Achieving a 166% increase in unit volume for loans closed in Q1 ’19 vs. Q1 ’18
  • More than doubling loan application volume for Q1 ’19 vs. Q1 ’18 (121% increase)
  • Selling more than $14.5M in real estate investments to retail investors on the platform
  • Surpassing more than 60,000 registered users
  • Eclipsing $100MM in loans to real estate developers to-date in more than two dozen states
  • Expanding product offerings, such as new construction loans and a fixed annualized notes product returning 5 percent on a 90-day term
  • Launching a second online public offering to purchase stock in GROUNDFLOOR directly

Real estate startup Reali acquires online lender Lenda, expands into mortgages (Housingwire), Rated: A

Reali announced Wednesday that it acquired Lenda, an online mortgage lender that launched in 2013 and currently operates in 12 states.

And with the acquisition, Reali is launching Reali Loans, a mortgage lending operation of its own.

Avant to pay $ 3.85M to settle allegations of deceiving borrowers (American Banker), Rated: A

The online lender Avant will pay $3.85 million to settle Federal Trade Commission allegations that it misled customers who were seeking to repay their loans.

The FTC said Monday that its commissioners approved the settlement by a 5-0 vote.

A Max Levchin-Backed Startup Raises $ 19 Million To Tackle Online Returns (Forbes), Rated: A

A San Francisco-based startup called Returnly is seeking to solve at least a portion of the headache—namely, the payment delay—by issuing instant store credit when you decide you don’t want an item. The company says that by assessing a shopper’s risk, it can offer store credit to 85% of customers on the spot, without first requiring that the item has been received or even put in the mail.

Returnly announced on Wednesday that it has raised $19 million in a Series B funding round, led by venture capital firm Craft Ventures and with participation from Max Levchin, the PayPal cofounder who currently runs Affirm.

Small businesses turning far more often to online lenders (American Banker), Rated: A

Last year 32% of credit-seeking small businesses applied to an online lender, up from 19% in 2016, according to the survey, which was released Tuesday. Over the same period, large banks, small banks and credit unions all saw either steady application rates or a slight decline in interest from those same small businesses, which typically had fewer than 10 employees.

Mastercard Redefines Choice at Checkout with Acquisition of Vyze (Business Wire), Rated: A

Mastercard (NYSE: MA) today announced it has acquired Vyze, a technology platform that delivers more choice – and purchasing power – to people who want their point-of-sale payment options to match the flexibility and convenience of today’s shopping experiences.

Increasingly, consumers are seeking alternative financing options,1 leaving merchants and financial institutions with a need to deliver these services at the point of sale. In the U.S. alone, these solutions represent a more than $1.8 trillion opportunity, according to Accenture.

Earnest Launches Private Student Loans (PR Newswire), Rated: A

Earnest today announced that it’s modernizing student loans with a new in-school student lending offering.

Built based on feedback from students and people with student debt, an Earnest student loan incorporates four unique differentiators:

  • Innovative eligibility check – A quick two-minute eligibility check requires only basic personal information, school details, and an estimated credit score.
  • Cosigner invite – Earnest’s application makes it simple and easy to invite a cosigner to the process.
  • Checkout  Clients can customize their loan according to their individual financial needs with easy-to-understand terms and a clear understanding of their monthly payments after graduation.
  • 9-Month grace period – Earnest found through talking with recent graduates that they wanted the flexibility of a longer grace period after graduation to get settled. Earnest offers a 9-month grace period after graduation compared to the 6-month industry standard.

Banks turn to a former rival to jump-start digital platforms (American Banker), Rated: A

In the “If you can’t beat ‘em, join ‘em” world of bank-fintech relations these days, TD Bank’s recent agreement with the online lender Avant fits right in.

Avant is expanding its efforts to license technology to traditional banks, and TD Bank in March announced it will use the Chicago company’s technology platform, called Amount, to power the bank’s unsecured loan product, TD Fit Loan. HSBC, Regions Banks and Banco Popular also use Amount.

Digital Lending Companies Considering Stricter Credit Approvals (Investing News), Rated: A

Over the past decade, the digital-lending industry has evolved to become more sophisticated. For example, companies are integrating big data and proprietary algorithms to analyze a borrower’s credit risk score in a matter of seconds, according to Juniper Research.

According to the firm, MPLs are projected to generate US$588 billion in loan origination value annually by 2023. This is estimated to account for 41 percent of SME funding around the world.

The research firm further reports that revenue from MPLs are predicted to grow at a 48 percent CAGR. This brings MPL platform revenue to US$137 billion annually by 2023, a 400 percent return from the estimated US$30 billion in revenue in 2019.

7 Smart Ways To Invest $ 1,000 (Forbes), Rated: A

2. Lend to those in need and earn some interest.

Lending Club is one such peer-to-peer lending service I tried out, and I found it to be very easy to use and reliable (see my 

Nearly 60% Of Millennials Look To Lottery For Retirement, Survey Says (FA-Mag), Rated: A

The odds of winning the $654 million Mega Million prize last year were put at one in 302 million, while the $345 million Powerball offered one chance in 292 million. But those astronomical odds apparently haven’t deterred the many Americans who are banking on using a lottery jackpot for their retirement nest egg.

Thirty-one percent of Americans don’t invest because they think it’s risky, but 39 percent, including 59 percent of millennials, feel it’s reasonable to think of the lottery jackpot as a potential means of retirement, according to the survey.

Miillennial men in particular (66 percent) believe the lottery is a reasonable retirement plan, compared to 58 percent of millennial women. However, if they did win the lottery, more millennial men (61 percent) than women (42 percent ) would save or invest the entire amount.

Direct Lending Investments Had Over 950 Investors (deBanked), Rated: A

Documents filed in a New York Supreme Court case by the receiver managing Direct Lending Investments (DLI), revealed that DLI had more than 950 investors worldwide with collective investments on the books totaling over $780 million.

No-income, no-asset mortgages are back (at one lender, at least) (Housingwire), Rated: A

And now, NINA loans are back, as 360 Mortgage Group announced this week that it is launching a no-income, no-asset mortgage pilot program.

Some online lenders charge 900% interest and ignore Virginia law. So borrowers are suing. (Pilot Online), Rated: A

A loose-knit group of Virginians, stung by triple-digit interest rates on payday and other loans, is trying to do what the General Assembly won’t — make sure all lenders, including online ones, follow Virginia laws.

The latest lawsuit, filed last week, alleges that four web sites — Golden Valley Lending, Silver Cloud Financial, Mountain Summit Financial and Majestic Lake Financial — set up in the name of the Habematolel Pomo of Upper Lake tribe in northern California were actually operated by non-tribal members in a Kansas City suburb, including the son of a payday loan executive convicted of fraud and racketeering.

Lendio Franchise Opens in Phoenix to Expand Access to Capital for Local Businesses (Lendio), Rated: B

Lendio has announced the opening of a new Lendio franchise in Phoenix. Through the Lendio Franchising program, Sam Foreman will help local businesses apply for loans, review their options and secure funding, easing the financial hurdles for area small business owners.

BlueVine Partners with Ocrolus for Faster Processing of Financing Applications (Ocrolus), Rated: B

Ocrolus today announced a partnership with BlueVine. BlueVine leverages Ocrolus technology to accelerate growth and scale operations efficiently, creating a faster and more seamless experience for its customers.

United Kingdom

Peer-to-peer lender Funding Circle’s loans under management soar to record highs (City A.M.), Rated: AAA

Loans under management grew 44 per cent to £3.4bn compared to £2.3bn in the first quarter of the previous year, and revenue growth soared by 40 per cent.

The firm reported that loan originations were up 23 per cent from £525m in the first quarter of 2018 to £644m between January and March this year.

Salary Finance raises $ 32.8m, hires SoFi co-founder for US push (Finextra), Rated: AAA

Salary Finance, a UK-based startup focused on salary-linked savings and loans for employees, has raised $32.8 million and hired SoFi co-founder Dan Macklin for a US expansion.

Welendus closes funding round as it prepares for India expansion (P2P Finance News), Rated: A

WELENDUS, the peer-to-peer lender focused on short-term loans, has closed its last seed funding round, as it prepares to expand into India.

City watchdog readies new rules for cryptoassets and P2P (FN London), Rated: B

The Financial Conduct Authority is prepping new rules for cryptoassets and peer-to-peer lending, two rapidly growing areas of fintech.

China

China’s P2P lending platform Dianrong raising $ 100m (Deal Street Asia), Rated: AAA

Shanghai-based peer-to-peer lending platform Dianrong is looking to raise $100 million in fresh funding, according to a Financial Times report, a move that should give it enough buffer to meet China’s strict capital requirement for P2P players.

The GIC-backed firm has not made any official statement about its fundraising plan but analysts said the move is part of the firm’s efforts to meet Beijing’s proposed Rm500 million ($74.5 million) capital requirement for P2P operators nationwide.

National Rules on Online Lending Still Far From Sight (Caixin Global), Rated: A

It will not be soon for China’s commercial banks, consumer finance service firms and other institutions to see a national regulation governing internet-based lending activities, despite recent progress on specific rules for online peer-to-peer lending and microloans, Caixin learned.

Large P2P lenders ordered to ready disclosures for regulators (technode), Rated: A

Large platforms with loan balances of more than RMB 5 billion ($750 million) must register with the information disclosure database by the end of May.

European Union

Tech unicorn Klarna could quickly be prepared to contemplate bourse itemizing (Infosurhoy), Rated: AAA

Swedish tech unicorn Klarna is nearing the point where it could seek a stock market listing, but it’s unlikely to be this year, the CEO and co-founder of the fast-growing online payments services firm said.

Klarna Expands Relationship with Acne Studios (Business Wire), Rated: B

The Stockholm-based fashion house Acne Studios has expanded their existing European partnership with Klarna. Showing at Paris Fashion Week, Acne Studios encompasses women’s and men’s ready-to-wear, shoes, accessories and denim, but also moves across the borders of fashion, art and design. With Klarna now available in Acne Studios’ online store, shoppers in the U.S. can choose to checkout with four equal payments – with no interest or fees.

Linked Finance marks record quarter (Tech Central), Rated: AAA

The first quarter of 2019 saw the platform provide more than €11.3 million in loans to Irish SMEs, an increase of 32% over the same period last year.

Since its establishment in 2013, Linked Finance has helped provide more than 2,000 loans and €92 million in funding to businesses across Ireland. Lenders who have supported SMEs through the platform have earned more than €7.1 million in interest and received more than €50.4 million in repaid principal since the business launched in 2013.

Linked Finance issued its largest loans ever in the quarter with a number of €300,000 loans provided. The average loan increased to €70,000.

Total Online Alternative Finance Grows 36% Topping €10 Billion (Crowdfund Insider), Rated: AAA

According to CCAF, in 2017 the alternative finance market grew by 36% to € 10.44  billion – dominated by the UK.

Excluding the UK, European online alternative finance industry grew 63% from €2.06 billion to €3.37 billion in 2017.

The top three European markets following the UK, include:

  • France at €661 million
  • Germany at €595 million
  • The Netherlands at €280 million
  • The Nordic countries collectively generated €449 million, making them the third-largest regional market in Europe following France and Germany.
Source: Cambridge Centre for Alternative Finance

Read the full report here.

Top 5 Real Estate Stocks To Invest In (Prague Post), Rated: A

But before I share these top real estate crowdfunding companies, I would first want to tell you about the characteristics which a best performing real estate should have. Well, they must have:

  • Pricing power
  • High usage rates
  • Regular dividend
International

Challenger banks overtake traditional banks in customer satisfaction, in 4 charts (Tearsheet), Rated: AAA

Challenger banks have leapfrogged to the forefront in overall customer satisfaction, according to a new study from FIS.

63 percent of direct bank customers report being “extremely satisfied”, compared to 52 percent of credit union customers and just 19 percent of customers of the top 50 global banks.

73 percent of all consumer interactions with banks in the US are done digitally.

Nearly two-thirds (65 percent) of younger millennials (between ages of 18 and 26) reported that they have not used any branches at all in the prior month.

Source: Tearsheet
Australia

April holidays to negatively impact 1 in 4 SMEs (My Business), Rated: AAA

According to new research commissioned by SME lender OnDeck, Australia’s small to medium enterprises (SMEs) are bracing for “a double whammy” of disruption from the back-to-back Easter/Anzac Day public holidays.

Over one in four (27 per cent) of SMEs expect the Easter/Anzac Day period to disrupt normal trading.

LET’S TALK: THE BIG 4 BANKS (Dynamic Business), Rated: A

Leo Tyndall, CEO and Founder Marketlend

In the wake of the Royal Commission we’re seeing a tightening of finance for SMEs with even long time customers being turned away for loans. For years, banks have taken too long and required too much, like property collateral, from SMEs. Innovations like marketplace lending are giving SMEs transparent and prompt access to.capital when they need it.

Stephen BarnesPrincipal at Byronvale Advisors Pty Ltd

I would say that the term ‘redundant’ may not be so appropriate but certainly through a number of factors the ‘Big 4’ may be less able to meet the needs or timeliness requirements of small business. A large number of small business owners need to use personal assets, usually the family home, as security for loans.

India

P2P firms seek RBI relaxation on lending limit (Business Standard), Rated: AAA

A little more than a year after the (RBI) came out with guidelines for peer-to-peer (P2P) lending companies to convert into non-banking companies (NBFCs), micro and small enterprises (SME) lending has turned out to be the focus area for these companies.

However, the current regulation does not allow a single lender to lend more than Rs 10 lakh across at a time. This is hampering growth prospects, say P2P players. The association of P2P lenders has sought relaxation in the norm, and requested the to raise the limit to Rs one crore, according to sources in the industry.

Fintech startups spot a lucrative space in ‘open banking’ (Economic Times), Rated: A

Fintech startups have started offering a broader set of banking services beyond payments and lending, pointing to a deep integration with lenders that has the potential to change the way customers access banking products.
Asia

Riding the Korea FinTech Wave (Finextra), Rated: AAA

South Korean Financial Services Commission (FSC) has identified three sectors — payments, data, and lending — to protect consumers, foster fintech innovation, and ultimately remove uncertainties that may restrict investments into Korea.

Legal Framework Around Marketplace Lending

South Korea is a country that has gone through two economic crises which has made banks extremely conservative especially in terms of lending. As such, 40% of the population cannot receive loans from tier one banks and must resort to secondary markets such as savings banks with extremely high interest rates above 20% and shady underground loan sharks.

Cambodia, Singapore In X-Border FinTech Pact (Cambodia Daily), Rated: A

Deputy Managing Director of MAS Jacqueline Loh said the relationship demonstrates a FinTech that may extend to other countries in the ASEAN region.

MENA

A ROADMAP FOR FINTECH FIRMS ENTERING FAST-GROWING EMERGING MARKETS (LendIt Fintech), Rated: AAA

This paper provides case studies and market analysis from the Arab Middle East and Africa as examples of fast-growing economies, open to best-in-class solutions, with both wealthy and underbanked populations. Key go-to-market findings serve to inform fintech firms, investors and others about participating in the region.

Download the report here.

Canada

TORONTO FINTECH, LENDIFIED, RAISES $ 15 MILLION CAD SERIES A (Betakit), Rated: AAA

Lendified, a Toronto-based FinTech, announced today that it has closed a $15 million CAD Series A funding round, in order to continue its growth within Canada.

The round was co-led by WD Capital Markets and INFOR Financial, and saw funding from CI Financial Corp., Windsor Private Capital, FirePower Capital, and a group of investors including Glenn Murphy, founder of FIS Holdings and former CEO of Gap Inc. and Shoppers Drug Mart.

Latin America

How sky-high interest rates are choking economic growth in Brazil (The Brazilian Report), Rated: AAA


Brazilian Credit Card Interest Rates: Enough to Choke a Horse or Risk Based Pricing? (Payments Journal), Rated: A

Bank accounts for consumers is still relatively low, with only 68%, compared to 79% in China.  Debit cards, however, outpaced credit by 2:1.

While you may see a slight uplift in the U.S. and U.K markets, consider this:

  • Annual consumer rates for credit cards topped 270 percent for unpaid balances.
  • As Brazil suffered its worst economic crisis in history, the banks raised credit card rates to a stunning 500 percent per annum on unpaid bills.
  • With Brazilians relying on credit an paying for everything from everyday goods to luxury items in installments, massive interest rates are being embedded into these payments.

Authors:

George Popescu
Allen Taylor

The post Thursday April 18 2019, Weekly News Digest appeared first on Lending Times.

Thursday September 6 2018, Daily News Digest

Purchase APR by Credit Score Range

News Comments Today’s main news: Varo Money gets preliminary approval for bank charter. SynapseFI raises $17M for banking platform. RateSetter ISA gets 130M GBP inflow in 8 months. Ex-Lloyds Banking boss set to make 3.3M GBP from Funding Circle float. LendInvest hits 1B GBP total lending. Today’s main analysis: International P2P lending volumes for August 2018. Today’s thought-provoking articles: […]

Purchase APR by Credit Score Range

News Comments

United States

United Kingdom

International

Asia

Other

News Summary

United States

Varo Money wins preliminary approval for US national bank charter (FinExtra) Rated: AAA

San Francisco-based fintech startup Varo Money has been granted preliminary approval for a national bank charter by the Office of the Comptroller of the Currency (OCC), paving the way for the creation of the first fully-licensed mobile-only bank in the US.

Co-founded by former Wells Fargo executive Colin Walsh, Varo Money has raised $79 million in funding over the past two years and currently provides a range of savings, loans and account-based services through a relationship with The Bancorp Bank.

The approval for a Federal banking charter will enable the firm to expand its portfolio of millennial-friendly financial products on a national scale, providing a wider range of services in all 50 states.

Four Things for FinTechs to Consider Before Filing a Bank Charter Application, says Auriemma Consulting Group (PR Web) Rated: A

Each FinTech now finds itself at a regulatory Rubicon: To either take control of its destiny by embracing one of the available bank charters, with all of the attendant compliance and regulatory challenges; or to remain a non-bank technology company, dependent on a bank partner or subject to multi-state laws.

Here are four of the most important factors for FinTechs to consider now:

  1. Determine the importance of interest rate exportation to your business.
  2. Consider the need for deposit funding.
  3. Consider the requirements of equity investors – now and in the future.
  4. Weigh the risk represented by a Bank Partner.

3 best pieces of career advice for young people from ex NFL and Twitter exec (NBC) Rated: AAA

Anthony Noto has had a star-studded corporate career.

He has been the chief operating officer of Twitter, the co-head of telecommunications, media and technology investment banking at Goldman Sachs and the executive vice president and chief financial officer of the National Football League. And currently, he is the chief executive officer at the online personal finance company SoFi, short for Social Finance.

  1. Fix problems, don’t pass the buck
  2. ‘Be a truth seeker’ so you can make the best decisions possible
  3. Focus on making your whole team better

SynapseFI raises $ 17M to develop its fintech and banking platform (Tech Crunch) Rated: AAA

SynapseFI, a startup that helps banks and fintech companies work together to develop technology, has announced that it raised a $17 million Series A funding round.

The funding actually closed at the back end of last year, but CEO Sankaet Pathak said the company has been so busy developing new products, hiring and more than that it is only getting around to disclosing the deal now. The investment was led by Trinity Ventures and Core Innovation Capital, with participation from other unnamed backers.

The San Francisco-based startup has sat under the radar for a while now despite starting up in 2014. Its core product is a platform that helps banks and developers work together. That involves developer-facing APIs that allow companies to connect with banks to offer services, and also bank-facing APIs that allow banks to automate and extend back-end operations.

The LendingTree Mortgage Offers Report contains data from actual loan terms offered to borrowers on LendingTree.com by lenders.

  • APR: Actual APR offers to borrowers on our platform
  • Down Payment: Though analogous to the LTV, we find that borrowers identify more closely with the down payment. Academic studies have also found that the down payment is the primary concern for homebuyers and one of the main impediments to entering the home buying market.
  • LTV: Actual LTV offered to borrowers on our platform
  • Loan Amount: The average loan amount borrowers are offered
  • Lifetime Interest Paid: This is the total cost a borrower incurs for the loan, inclusive of fees.
Source: Lending Tree

Credit unions split on potential threat posed by OCC’s fintech charter (Credit Union Journal) Rated: A

With the Office of the Comptroller of the Currency having approved a national bank charter for fintechs this summer, a host of insiders have weighed in on potential pros and cons, and how OCC’s move might ultimately impact credit unions.

“The threat to any financial institution, including credit unions, would be around the prospect of a fintech with compelling, modern technology and innovative approaches to traditional banking services becoming regulated and competing with CUs and banks,” said Michael Carter, EVP of digital practice for the Memphis-based Strategic Resource Management (SRM).

Ted Bilke, president of Symitar and VP of Jack Henry & Associates, said one charter “negative” could be enabling large players like Walmart and Amazon to “provide traditional depository and lending services” that compete directly with traditional credit union business.

Should You Take Out a Loan for Payroll? (NAV) Rated: A

When cash flow slows, becomes stagnant, or is otherwise disrupted (large purchases, overdue accounts, etc.), business owners can become vulnerable to a variety of financial woes. Bills can go unpaid, vendor relationships can become strained, and, if the problems persist, your credit can take a quick slide downward. Unfortunately, cash flow problems can also impact another essential part of your business – payroll.

Aside from leaving employees disgruntled, failure to meet your payroll obligations is considered a violation of the Fair Labor Standards Act (FLSA), which can result in penalties handed down from the Department of Labor.

Why can’t you make payroll? 

Though the exact reason for payroll problems can vary from business to business, there are typically two primary circumstances that leave business owners frantically trying to make good on this obligation:  changes in cash flow or unexpected expenses.

Americans Are Planning to Spend Less on Fashion This Fall; Many Are Embracing Alternatives to Cash or Credit Cards (Business Wire) Rated: A

Affirm, Inc., the company founded by entrepreneur Max Levchin to provide fair and honest alternatives to traditional credit, today announced the “Shop with Affirm” fall fashion campaign and released the findings of a new survey revealing how Americans plan to shop and pay for apparel purchases this fall.

Starting in September, Affirm will feature fashion and apparel brands that partner with Affirm across Instagram and Affirm.com, showing consumers where they can buy now and pay for purchases over time with Affirm. Many fashion brands now give customers the option to use Affirm to buy items with no interest, repaid in three easy monthly installments.

The campaign was designed to make great brands accessible to more customers, offering a transparent payment option that better aligns with shoppers’ cash flows and helps them budget for fall purchases.

White Oak Healthcare Finance Closes $ 20 Million Financing For Fox Rehabilitation (Business Wire) Rated: B

White Oak Healthcare Finance, LLC (“White Oak”), today announced it acted as sole lender and administrative agent on the funding of a $20 million asset based senior credit facility for Fox Rehabilitation, Inc. (“Fox”). The funds were primarily used to refinance existing indebtedness and support continued growth.

Fox provides physical, occupational and speech therapy services to help geriatric patients regain a better quality of life. “We are excited to partner with a practice that is so highly focused on clinical outcomes. By investing in people and processes, Fox has demonstrated the unique ability to maintain continuity of care while expanding throughout the country,” said Ross Eldridge, Managing Director at White Oak.

United Kingdom

RateSetter ISA sees £130m inflows in eight months (Altfi News) Rated: AAA

Peer-to-peer lender RateSetter has seen a inflows of more than £130m into its Innovative Finance ISA in just eight months.

The firm, one of the three largest P2P lending platforms in the UK, launched its IFISA to existing customers in February and new customers in March. Like its peers Funding Circle and Zopa, the platform was fully regulated and therefore able to launch an IFISA later than many of its smaller peers.

John Battersby, head of communications at the firm, says that demand has been higher than expected for Ratesetter’s ISA.

Disgraced ex Lloyds Banking boss set to make £3.3m when web-based lender Funding Circle floats (This is Money) Rated: AAA

The disgraced former boss of Lloyds Banking Group could make millions of pounds when fintech darling Funding Circle lists on the stock market in the coming weeks.

Eric Daniels, who orchestrated Lloyds’ disastrous takeover of rival HBOS during the financial crisis which left the bank in need of a £20billion taxpayer bailout, is an investor and director at the peer-to-peer lender.

He owns a 0.2 per cent stake in the business, which looks set to be worth £3.3million when it joins the stock market.

Funding Circle “Go further” by Lucky Generals (Campaign) Rated: A

Funding Circle, the small business loans platform, breaks the functional conventions of most financial services advertising in its second TV campaign.

 

LendInvest’s Total Lending Capital Hits £1 Billion as Fintech Raises £150 Million in Residential Development Funding in New JV (Crowdfund Insider) Rated: AAA

LendInvest, an online property finance platform, reports it has secured £150 million of “initial funding” in a new joint venture with Nomura, a global investment bank,  and Magnetar, an alternative investment manager. This new capital infusion now places LendInvest’s total capital for lending at around £1 billion. The JV with LendInvest will see the funding used for residential development finance.

Nomura is a Japan headquartered financial services group with an integrated global network spanning over 30 countries. Magnetar, based in the US, is a $13.7 billion investment manager that seeks to achieve stable risk-adjusted returns by opportunistically employing a wide range of fixed income, energy, quantitative and fundamental investment strategies.

Proposed investor restrictions threaten P2P sector’s growth (Peer2Peer Finance) Rated: A

THE PEER-TO-PEER lending industry has blasted the City watchdog’s proposed investor restrictions as unfair, costly and damaging to the sector’s future.

P2P platforms have been busy digesting the Financial Conduct Authority’s (FCA’s) long-awaited post-implementation review of the sector – released over the summer – and while most are happy with plans for heightened transparency and loanbook disclosure, there are concerns over proposed marketing restrictions and appropriateness tests  for investors.

These proposals would make P2P lending platforms become the preserve of sophisticated, high-net-worth or ‘restricted’ investors, akin to crowd bond providers like Abundance and alternative investment firms such as Goji.

WELENDUS LAUNCHES INDUSTRY-FIRST 15% RETURN ISA PRODUCT (Fintech Finance) Rated: A

Welendus, the FCA-approved Peer-to-Peer (“P2P”) lender, today announces the launch of an industry-first; it’s HMRC-approved Innovative Finance ISA (“IF-ISA”), which will allow investors to invest their annual ISA allowance in a flexible high return investment product, with no income tax on the interest earnings. This product will be the first ISA product on the market with up to a 15% return.

The UK’s short-term lending market is now worth £3.7 billion per year[1], however new innovative products have been few and far between, leaving great opportunity for disruption and innovation. In addition, the UK’s P2P lending market is expected to exceed £10 billion this year, and up to £19 billion by 2020.

Buy to let Britain: A divided nation sell or stay? (Property Reporter) Rated: A

Britain’s buy-to-let landlords are divided over their future, in light of tax and market changes – according to latest research from property-backed P2P lending product, Octopus Choice.

While three in five buy to let investors (56%) want to keep or buy more rental properties, two in five (44%) are looking to sell. The majority of UK landlords still view it as a money-making asset class but think it will be on the decline in the future. As the market consolidates, buy to let owners are polarized across the country, with tough decisions to make on whether to stay or leave the sector.

For those looking to exit the market, nearly a quarter blame falling yields (24%) and tax changes (23%), while a fifth blame cooling house prices (19%). Three in five (60%) say that property management had become a burden and 61% undervalued the costs involved.

Charlotte Rogers: The demise of Wonga shows toxic brands will always fail (Marketing Week) Rated: A

At one point Wonga was the UK’s biggest payday lender and tipped for a $1bn listing on the New York Stock Exchange, but it collapsed under the weight of compensation claims from customers who had been mis-sold loans and has not done enough to repair the damage.

Some 200,000 customers who owe an estimated £400m in short-term loans are still being asked to make repayments to the company, despite the fact compensation claimants are unlikely to ever receive a full pay-out.

The current reality is a world away from 2008, the year Wonga launched. The company positioned itself as a flexible digital alternative to banks and as an option for people looking online for a financial fix in 15 minutes.

Taking a cheeky and brash tone, the loans firm invested heavily in marketing to raise its brand awareness. Wonga’s advertising spend rocketed from £22,000 in 2009 to £16m by 2011, according to estimates by analysts AC Nielson MMS.

In 2010, Wonga made its first high profile move into sponsorship, teaming up with Transport for London to sponsor five hours of free late-night travel on New Year’s Eve. That same year the company made its first foray into the world of sports through a shirt sponsorship deal with Blackpool FC, which it would continue until 2015.

The PRS in a divided Nation – 44% say sell and 56% stay (Property 118) Rated: A

Britain’s buy-to-let landlords are divided over their future, in light of tax and market changes with 56% buy to let investors wanting to keep or buy more rental properties, and 44% are looking to sell. This is according to latest research from property-backed P2P lending product, Octopus Choice.

The majority of UK landlords still view it as a money-making asset class, but think it will be on the decline in the future. As the market consolidates, buy to let owners are polarized across the country, with tough decisions to make on whether to stay or leave the sector.

Meet the Wonga wannabees: Britain cheered when its biggest payday lender went bust last week… But beware its rivals still out there (This is Money) Rated: A

Wonga is no more — but there are still dozens of other payday loan firms out there.

So who are the Wonga wannabes?

SUNNY LOANS

Borrowers can apply for a loan of between £100 and £2,500.

The standard representative APR is 1,293 per cent, with risky borrowers charged up to 1,617 per cent.

QUICKQUID

Owned by parent firm Cash- EuroNet UK, QuickQuid has been trading since 2007 and offers loans up to £1,000 for new customers — £1,500 to those returning.

PEACHY

It offers loans of between £100 and £1,000 for between one and 12 months.

MR LENDER

It offers loans of between £200 and £1,000 over a term of six months.

Its typical APR is 1,256 per cent and maximum is 1,462 per cent. Borrow £1,000 over six months at the standard rate and you would repay a total of £1,815.

MYJAR

Based in Westcliff-on-Sea, Essex, Myjar launched a decade ago and offers loans of between £100 and £7,200 over three, six, 12 or 24 months, with a maximum interest rate of 1,326 per cent.

China

Slow-Motion Crash Sees Chinese Auto Stocks Skid 40% This Year (Wall Street Journal) Rated: AAA

A plan by Great Wall Motor Co. GWLLY -4.12% to offer discounts of between 11% and 27% on its cars has helped trigger a round of selling this week, according to analysts at Deutsche Bank.

Source: Wall Street Journal

Dongfeng Motor Group Co. DNFGY 8.84% Geely Automobile Holdings Ltd. GELYY -0.90% andGuangzhou Automobile Group Co. 2238 -2.97%—among the largest Chinese auto makers listed in Hong Kong—have each dropped by between 4% and 7% in the last two days of trading.

Combined, the trio have lost nearly 194 billion Hong Kong dollars (US$24.8 billion) in market capitalization this year, Datastream shows, while a Thomson Reuters index of Hong Kong-listed auto and truck manufacturers is down 39%.

Vehicle purchases are on the decline: In July, new car sales were 5.5% lower than in the same month last year. Sales of insurance policies are also falling. Peer-to-peer lending for car purchases had become increasingly popular, but after a series of lending scandals the government has cracked down.

International

International P2P Lending Volumes August 2018 (P2P Banking) Rated: AAA

Source P2P Banking

Startup Influx into Fintech: Is There Still Space for Growth? (Equities) Rated: AAA

We need to understand that the fintech industry is extremely broad, and the user base does not fit into a single category. Therefore, the applications of financial technology will find relevance in many spheres. This is one of the factors that have accounted for a massive growth in the number of fintech startups across the world. It is estimated that the number of startups in the fintech space has increased 8-fold; from an estimated 1000 companies in 2005 to more than 8000 companies in 2016.

Source: Equities

The fintech industry is still in a growth phase and therefore there is every possibility that we will continue to see an increase in the number of startups jumping into the fintech space. However, the emerging markets will see more of the increase in the number of startups due to the underserved nature of these markets.

ACORN OakNorth Holdings closes $ 100m round as business continues to grow ahead of plan (Fintech Finance) Rated: A

ACORN OakNorth Holdings has today announced that it has secured $100m from the EDBI of Singapore, NIBC Bank, Clermont Group, GIC, and Coltrane Asset Management. The $100m represented 4.3% of the company. The capital will be used to accelerate the growth of ACORN machine and enable OakNorth to continue scaling its lending efforts in the UK.

Meanwhile, ACORN machine has opened offices in New York and Singapore to service clients across multiple continents and will have over $5bn of assets under service on its platform by year end. NIBC Bank is the platform’s first client in the Netherlands. ACORN machine’s team now consists of almost 100 people and in the short term expects to add another 50 people across growth and operations, engineering, machine learning and data science.

Biz2Credit Launches New Virtual CFO for Small Businesses (Crowfund Insider) Rated: A

Biz2Credit announced on Wednesday the launch of its BizAnalyzer Virtual CFO, which is described as an advanced software tool that enables business owners to make smarter financial decisions about their companies. According to Biz2Credit, the virtual CFO software is available to clients of Paychex Promise, a subscription-based service from Paychex, a provider of integrated human capital management solutions for payroll, HR, retirement, and insurance services.

Australia

Lender produces guide to business loans (Broker News) Rated: A

An online lender has released a free eBook to help brokers move into writing unsecured online business loans.

The ‘Guide to Online Business Loans’ is the first comprehensive guide to alternative lending produced by a fintech lender in Australia.

It was created to overcome barriers such as a lack of education and knowledge of the industry, to help brokers diversify.

India

P2P lending: How the Rs 10 lakh cap will affect small businesses? (The Economic Times) Rated: AAA

If you are salaried and earn up to Rs 20,000 every month, cold calls and emails from banks for pre-approved personal loans is a regular thing. But for someone planning to open a franchise store or start a catering business, getting an unsecured loan is not easy. Banks and NBFCs are reluctant to fund businesses or expansion plans of MSMEs/SMEs or proprietors.

This could be due to factors like lack of credit data, remote location or poor education. Banks and financial institutions require an individual to display established source of income, thus leaving about 80 percent of the population with no access to credit.

The Peer-to-peer (P2P) online platform aims to bridge the gap between people who can lend and those who want to borrow without any security. The P2P industry took its first baby step in October in the form of RBI regulations which allows high-end investors to lend their money to low-end borrowers.

Asia

The evolution of sme financing (The Business Times) Rated: AAA

This gap in payments in certain industries can be up to several months, such as in the construction sector. When unexpected crises hit, such as late payments by customers or budget overruns during projects, businesses without adequate financing can be left high and dry.

With so much at stake, SMEs need to ask themselves if their current financing facilities are adequate for their needs and future expansion.

While the SME Financing Survey suggests that SMEs do not have a serious problem with getting external debt financing as 90 per cent of SMEs were successful in securing loans in 2017, other SME surveys indicate that financing is still a top concern by this particular segment. In a separate SME Development Survey 2017 by DP Info, 35 per cent of SMEs cited facing financing concerns – up from 22 per cent in 2016 and 14 per cent in 2015.

Kristine Ng: Fundaztic’s SME Lifeline to Plug the RM80 Billion Funding Gap (Awani Review) Rated: A

Kristine Ng understands very well the struggles SMEs go through to obtain financing. She spent a decade in the banking sector – five with Credit Guarantee Corporation (CGC), which was set up with the sole objective to help SMEs obtain credit facilities by providing guarantee schemes.

Recognising the need to plug the funding gap, particularly among smaller and micro enterprises. Kristine left her corporate career to start to start peer-to-peer (P2P) platform Fundaztic with a team of senior level ex-bankers.

Hard cash (Business Times) Rated: A

Indonesian ride-hailing and online payment company GO-JEK is expanding its financial technology services through partnerships with three peer-to-peer (P2P) lending firms: Findaya, Dana Cita and Aktivaku.

GO-JEK’s payment system GO-PAY launched last year, accounting for more than half of the startup’s transactions. The company integrated GO-PAY into the GO-JEK app, enabling customers to store money on their mobile phones — similar to a digital debit card. Adding to the GO-PAY account can be done from a bank account or ATM. If customers don’t have a bank account, they can hand cash over to GO-JEK’s drivers, and it will be transferred immediately to their account.

MENA

New Report Trails the Rise of Israeli Fintech (C Tech) Rated: AAA

Over the last 18 months, 16 multinational financial firms started operating in the Israeli tech system, or increased their local footprint through strategic partnerships and investments, according to a new report by Start-Up Nation Central (SNC), a nonprofit working to promote Israeli tech.

Newcomers include French insurance firm AXA SA, Bank of Montreal, Fosun, TD Bank, AmTrust, and Mastercard.

Authors:

George Popescu
Allen Taylor

Monday August 27 2018, Daily News Digest

personal loan balances

News Comments Today’s main news: Upgrade gets $62M injection from CreditEase Fintech Investment Fund. Elevate Credit issues earnings results. Wonga on the brink of collapse. Today’s main analysis: Calculating spreads for valuation, competition, and opportunity in unsecured lending (A MUST-READ). Today’s thought-provoking articles: Lenders who shunned personal loans are now competing for them. The sophisticated algorithms behind P2P […]

personal loan balances

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Consumer Credit Platform Update Secures $ 62 Million Through Series C Funding Round Led By CreditEase Fintech Investment Fund (Crowdfund insider) Rated: AAA

CreditEase FinTech Investment Fund (CEFIF), the U.S.-based Fintech Fund of the Chinese fintech CreditEase, recently led $62 million Series C round investment for consumer credit platform, Upgrade.

Calculating Spreads for Valuation, Competition & Opportunity in Unsecured Lending (PeerIQ), Rated: AAA

US stocks look set to enter the longest-ever bull market. The current bull market at 3,453 days since the low in March 2009 is now tied with the 1990-2000 bull market, and is on pace to exceed that target.

Competition – and Opportunity – in Unsecured Lending

Competition for personal loans is heating up. Mailings soliciting personal loan borrowers exceeded credit card mailings in six of the last seven months, even though the credit card industry is almost 6 times larger. Goldman Sach’s Marcus has been one of the new competitors having originated nearly $4 Bn in personal loans since their launch – approximately a $2 Bn annual run-rate – smaller than Lending Club and others, and likely tempering their ambitions due to late-cycle credit conditions. Marcus recently launched in the UK with personal loans and savings accounts.

Source: PeerIQ and TransUnion
Source: PeerIQ and TransUnion

Valuation Framework

The price of a loan is the present value of the loan’s future cashflows (after accounting for losses and prepayments), discounted by an appropriate discount rate:

Source: PeerIQ

Calculating the Spread at Origination

The SATO is a zero-volatility spread over the benchmark swap curve that equates the present value of the cashflows to the market-observed price. Since the benchmark is considered a risk-free rate, SATO is effectively a credit spread due to the uncertainty of future cash flows.

Source: PeerIQ

Elevate Credit (ELVT) Issues Earnings Results (Fairfield Current) Rated: AAA

Elevate Credit (NYSE:ELVT) announced its quarterly earnings data on Monday, July 30th. The company reported $0.07 EPS for the quarter, topping the Zacks’ consensus estimate of $0.05 by $0.02, MarketWatch Earningsreports. Elevate Credit had a return on equity of 12.68% and a net margin of 0.14%. The business had revenue of $184.38 million during the quarter, compared to the consensus estimate of $186.46 million. During the same period in the previous year, the company posted $0.08 earnings per share. The business’s revenue for the quarter was up 22.5% on a year-over-year basis. Elevate Credit updated its FY18 guidance to $0.55-0.90 EPS.

Lenders Shunned Risky Personal Loans. Now They’re Competing for Them. (Wall Street Journal) Rated: AAA

Lenders are stepping up offers of consumer loans with few strings attached, often to individuals with poor credit histories they all but ignored in the years after the financial crisis.

The offers promise a way to help pay down other debts or fund home renovations or vacations, fueling concerns that customers could overextend themselves. “Take control of your finances,” says one mass mailing. “Your dream can come true,” says another.

American Express Co. , Goldman Sachs Group Inc., GS -0.52% LendingClub Corp. LC -1.54%and Social Finance Inc. are among those behind an onslaught of unsolicited mailings offering unsecured loans, known as personal loans, as large as $100,000. In the first half of this year, lenders mailed a record 1.26 billion solicitations for these loans, according to market-research firm Competiscan. The second quarter marked the first period that lenders mailed out more offers for personal loans than credit cards, a much bigger market, according to research firm Mintel Comperemedia.

The sophisticated algorithms behind peer-to-peer money lending (Silicon Angle) Rated: AAA

One of the companies that has capitalized on growing consumer interest in P2P is LendingClub Inc. The company has issued $38 billion in loans since its founding in 2007, and the firm has built a sophisticated technology platform on which to evaluate risk and put investors and borrowers together.

LendingMatch is essentially the firm’s secret sauce. The system relies on algorithms that can weigh a number of key factors, including an investor’s risk tolerance and the borrower’s credit score, to determine a suitable match. Other factors include geography, education and connectedness within social networks.

2018 Supermoney Mortgage Industry Study (SuperMoney) Rated: AAA

It’s no surprise FinTech lenders are disrupting the mortgage industry In 2017, the top lender in the United States was Quicken Loans with $25.1 billion. The second largest loan issuer was Wells Fargo. FinTech lenders process mortgage applications faster (10 days as opposed to 50 days). They also have lower default rates — 25% lower (source). FinTech lenders also tend to be more agile and flexible when it comes to adapting to changing financial circumstances.

What is the size of the U.S. Housing Market?

If you combine mortgage debt and housing equity you get a total value of $25.1 trillion, which is nearly $2.5 trillion more than its previous peak in 2006.

Source SmartMoney

See the full report here.

At Marlette Funding, CEO Jeffrey Meiler a ‘straight shooter’ with a sense of humor (Delaware Online) Rated: A

Jeffrey Meiler founded Marlette Funding in 2013. The CEO calls himself the company’s “first employee.”

Five years later, there’s more than 300 of those. Its quick growth, and Meiler’s drive in heading the Fairfax-based lender known for its brand Best Egg resulted in a Top Workplaces award for leadership at the mid-size company level.

Marlette Funding as a whole placed second overall among mid-size companies as the best place to work.

Alternative Lenders to Gain Greater Predictive Power with TransUnion CreditVision Link Short-Term Risk Score (Transunion) Rated: A

The opportunity for alternative credit and small dollar loans remains high with a market size that approaches $40 billion annually. To help these lenders better segment risk in an increasingly competitive market, TransUnion (NYSE: TRU) introduced today the CreditVision Link Short-Term Risk Score.

This new predictive risk scoring model, tailor-made for alternative lenders, combines traditional and alternative data to offer a holistic picture of consumers. Information about the benefits of this new risk score will be highlighted during TransUnion’s webinar, Alternative Loan Insights with TransUnion Risk Scores, scheduled for 1 p.m. CDT on August 30.

Unity Bank streamlines lending processes with Finastra (Finastra) Rated: B

Unity Bank, whose holding company is based in Augusta Wisconsin, and which has branches in Minnesota, has selected Finastra’s Total Lending solution to streamline its commercial lending and consumer lending processes, including its agricultural lending business.

United Kingdom

UK’s biggest payday lender Wonga ‘on the brink of collapse’ (The Guardian) Rated: AAA

Britain’s biggest payday lender, Wonga, is teetering on the brink of collapse following a surge of customer compensation claims in recent weeks that could cause it to call in administrators.

The short-term loan provider has reportedly lined up accountancy firm Grant Thornton to handle a potential administration of the company should its board believe it is unable to avoid falling into insolvency. The report from Sky News said Wonga could appoint Grant Thornton as soon as this week.

Overfunding: P2P Lender Welendus Secures £850,000 Funding Target Through Latest Seedrs Round (Crowdfund Insider) Rated: A

Just a little over a week after launching its latest equity crowdfunding round on SeedrsShort-term peer-to-peer lending platform Welendus has successfully secured its initial £850,000 funding target. Founded in 2015, Welendus seeks to redefine the short-term lending market by launching a peer-to-peer short-term lending platform to help customers with short-term financial needs.

Assetz Capital supports construction of 517 homes during summer (Development Finance Today) Rated: B

This announcement was in addition to the P2P lender reporting a surging interest from business owners and developers in the last two months, which saw it fund over £60m to SMEs.

In May, Assetz Capital revealed that it had lent over £500m since its inception in 2013, which has now increased to £590m, up 18% in less than three months.

In order to fulfil the influx of enquiries, Assetz Capital has appointed six more regional relationship directors in 2018, bringing the total to 26, and has also hired four senior relationship managers across the UK.

Victory Park Capital fund continues strong performance (Peer2Peer Finance) Rated: A

VICTORY Park Capital Specialty Lending (VSL) is expecting to recommence payment of performance fees to its investment manager in the coming months, after an improvement in net asset value (NAV) returns.

In its latest monthly report, released on Friday, the alternative finance-focused fund reported a total NAV return of 1.15 per cent in July.

In May, VSL posted a record NAV return of 1.03 per cent – the highest figure since its fruition in March 2015 – and has now posted NAV returns above one per cent for three consecutive months.

China

Here’s what to expect from Yirendai’s earnings report (Markets Insider) Rated: AAA

Yirendai will report Q2 earnings on August 28.

5 analysts are forecasting earnings of $0.779 per share compared to earnings of $0.663 per share in the same quarter of the previous year.

Analysts expect Yirendai to report sales of $256.2 million, an increase of 45.52% over the same period last year.

Peer-to-Peer Cryptocurrency Lending Gains Popularity in China (Coin Geek) Rated: A

At the same time that China is putting pressure on the crypto industry, peer-to-peer (P2P) cryptocurrency lending continues to gain in popularity. According to local media outlet Sohu, more and more crypto lending platforms are popping up, but their livelihood could ultimately be cut short because of tightened regulations in the country.

One source close to the activity is a crypto veteran, Zhang Le. He told the media outlet, “At present, most of the market only recognizes two major currencies, Bitcoin and Ethereum. This business is currently earning interest.” Another individual, Xu Lizhen, pointed out that those lending crypto are generally long-term holders who have no interest in trading on the markets. He added, “This is just the need. When the currency is low, people who are speculating in the currency will definitely not be willing to sell the coins. Once they are short of money, they must find such platforms. The demand has formed this market.”

International

Crowdfunder Indiegogo allows companies to sell security tokens (Coin Geek) Rated: AAA

Crowdfunding giant Indiegogo has expanded its cryptocurrency operations to make room for security tokens. This comes less than a year after the company started offering tokens on its platform last December.

According to Crowdfund Insider, Indiegogo’s first security token offering (STO) is already available on the platform. The STO is from a luxurious ski resort, St. Regis Aspen Resort in Aspen, Colorado. According to reports, Indiegogo will only allow accredited investors to purchase the resort’s Aspen Coins, which will be offered by a real estate investment trust (REIT) called Aspen Digital.

What are the Possible Advantages of Blockchain Technology in P2P Lending? (Financial Report 24) Rated: A

With smart contracts, ownership can be attested and linked to the terms of a specific contract. Smart contracts are kept on the blockchain and performed automatically as a part of the transaction. For instance, the XDC blockchain is constructed upon Quorum. The power smart contract functionality which exists in the Ethereum protocol is accessible easily via Quorum. XinFin created a smart contract manager which enables for interoperability between the public blockchains and XDC blockchain. The platform included punitive smart contracts which link to the QuorumChain consensus smart contracts to guarantee those who stake at XDCs to operate network infrastructure remain truthful.

European Union

TRAXION’s Blockchain Technology to help in building one Mindanao (Davao Today) Rated: A

A transaction management company that specializes in blockchain technology believes that Mindanao will be a good place to implement this kind of technology by connecting large business companies to micro entrepreneurs to create one economic force.

Statistics shows that one of the reasons why a typical farmer refuses to open a bank account is because they only wear slippers. “It sounds absurd but is the truth. Most of the indigenous people in this region doesn’t have their own identities so they have the tendency to change their names if they want to. They are prone to abuses because of this,” she said.

India

List of top 10 P2P lending startups in India (The Indian Wire) Rated: AAA

According to a report by Boston Consulting Group (BCG), the fintech space has witnessed an explosive growth in the recent years and digital lending industry is expected to touch $1 trillion over the next five years.

Here is a comprehensive list of top 10 P2P lending startups in India:

Faircent – It last raised $4 million in a series B funding from Muthoot Fincorp and Incofin Investment Management in December 2017.

Lendingkart – The startup had last secured ₹300 crores in debt funding Aditya Birla Sun Life AMC and others in August 2018.

Finzy – It provides a digital platform to facilitate quick, easy and secure loans at personalized rates based on borrowers capabilities.

NBFCs to see up to 35-40% rise in hiring in next 1 yr, say experts (Times of India) Rated: A

Hiring activity in the non-banking financial companies (NBFC) sector is likely to expand by up to 35-40 per cent in the next 12 months driven by rising innovation and growth, according to industry experts.

The ability of NBFCs to tap ‘unbanked’ customer base at a time when the banks are facing headwinds in coming out of the NPA mess is driving the growth in the sector, they explained.

Experts see increased hiring in tier-II cities for roles in sales, collection underwriting and risk.

Fintech startup Shubh Loans raises $ 4.2m from Saama Capital, others (Deal Street Asia) Rated: A

Datasigns Technologies Pvt. Ltd, which runs fintech lending platform Shubh Loans, has raised $4.2 million in an investment led by venture capital firm Saama Capital, said Monish Anand, founder of Shubh Loans. Shubh Loans’ existing investors—SRI Capital, Beenext and Pravega Ventures—also participated in the round. The fintech startup had raised $1.6 million from these investors in September 2017.

Asia

Partnerships pushing Pi Pay to next level (Southeast Asia Globe) Rated: A

The main partnership, with its growing customer base, has seen the Pi Pay app downloaded 270,000 times in the last year with close to US$100 million in transactions processed through the app.

Partnerships with merchants mean Pi Pay can be used in over 2,100 locations across Cambodia, with new partners being added every day.

Partnerships with overseas fintech giants like Alipay and WeChat have opened up new possibilities for Pi Pay merchants to service the growing number of Chinese visitors to the Kingdom.

OJK issues regulation on financial technology (The Jakarta Post) Rated: A

The Financial Services Authority (OJK) has issued a regulation on financial technology (fintech), which is more comprehensive than a prevailing regulation that only regulates peer-to-peer lending.

The regulation, issued on Aug. 15, consists of 45 articles that cover innovation in digital technology for the financial sector, kontan.co.id reported on Friday.

The regulation covers a number of issues such as transaction settlement that relates to investment, while for fund-raising, the regulation covers equity crowdfunding, virtual exchange, smart contract and alternative due diligence.

Africa

Kenyan fintech lender gets Sh45m grant (Business Daily) Rated: AAA

Kenya-based financier Lendable has secured a Sh45 million convertible grant from Dutch Development Bank (FMO) that will go into funding alternative lenders set up across the region.

Lendable, a fintech platform for unconventional lenders, operates in microfinance and other pay-as-you go services including energy.

Authors:

George Popescu
Allen Taylor

Wednesday August 15 2018, Daily News Digest

financial assistance

News Comments Today’s main news: Square expands Bitcoin service to all 50 states. Funding Circle says higher rates will help them. Zopa says UK investors likely to hate Marmite. Preview of China Rapid Finance Q2 earnings. Funding Societies hits SGD200M in SME crowdfunding. Today’s main analysis: How non-prime families cover college tuition. Today’s thought-provoking articles: How Goldman Sachs created […]

financial assistance

News Comments

United States

United Kingdom

China

Other

News Summary

United States

Square Expands Cash App Bitcoin Service to All 50 US States (CoinDesk) Rated: AAA

The company – which was co-founded by Twitter chief executive Jack Dorsey – announced the service expansion through a Tweet on Monday, months after the firm initially rolled out the bitcoin service to investors in the country.

As reported by CoinDesk, Square officially launched the bitcoin purchasing option on its Cash App in January following a testing phase started last year. However, the service was not offered in the states of New York, Georgia, Hawaii and Wyoming due to their more restrictive regulations regarding bitcoin transactions.

How Non-prime families cover college tuition (Center for the New Middle Class) Rated: AAA

Students from non-prime households are more likely to attend public, community, or junior colleges compared to students from prime households.

  • Consequently, they are more likely to live at home.
  • The majority of these students come from single-parent or homes with a stepparent.
  • Compared to prime parents, non-prime parents are significantly more likely to say that financial aid affected their choice of schools.
  • Non-prime parents are slightly more sensitive to schools welcoming students from diverse economic backgrounds.
  • Students from non-prime families are extremely reliant on financial aid as nine out of ten will use some form of financial assistance to cover college expenses in the Fall 2018, compared to three-quarters of prime students.
  • Access to financial aid is critical for these students because most of them come from single-income households with fluctuating incomes where their parent’s financial situation is precarious and burdened with high levels of debt.

Almost twice as many nonprime students, 42%, attend public/community/jr colleges compared to prime students, 23%.

Source: The Center for the New Middle Class
Source: The Center for the New Middle Class
Source: The Center for the New Middle Class

Read the full report here.

How Goldman Sachs Created Marcus To Be a Dominant Force in Consumer Banking (Lend Academy) Rated: AAA

First, there was the launch of GS Bank in April 2016. Six months later Goldman Sachs introducedthe world to their Marcus brand. They began as an online lending platform offering unsecured consumer loans up to $30,000 with interest rates ranging from 5.99% to 22.99% (they now offer loans up to $40,000 and rates range from 6.99% to 24.99% as of August 2018). Their big differentiator was offering no fees. There was no origination fee for the borrower, no prepayment fees and no late fees.

They gained traction very quickly. They crossed $1 billion in total originations within eight month of launch. At the end of their first year they were at $1.7 billion. At that time they brought their deposit business under the Marcus brand, it was formerly branded under GS Bank. Now when you go to the Marcus website you are presented with two options: personal loans and savings accounts (which includes certificates of deposits).

We learned in Goldman Sachs Q2 earnings call in July that Marcus had originated more than $4 billon in total loans since launch and they had 1.5 million customers. Their deposit base is now $23 billion.

Lenmo, the Venmo for Lenders, Set to Launch for IOS (Bank Innovation) Rated: A

Whether it’s a consumer lender like Goldman Sachs’s Marcus or a point-of-sale lender like Affirm or even SMB lenders like BlueVine, there is a lot of perceived opportunity in the lending market.  Add a P2P dimension to that, and you have Lenmo.

The new app is launching in the next few weeks in Apple’s app store, Bank Innovation has learned. Lenmo, founded less than a year ago, is a peer-to-peer app in which the lender can select a borrower as well as set their own interest rate, “which will be higher than most alternative options,” Margaret Cipparone, a Lenmo spokesperson, told Bank Innovation. These individual lenders will facilitate small, unsecured loans ranging from as low as $50 to as high as $5,000, she said.

For borrowers, they can choose the various lenders available on the app and select the one they find most suitable. The goal behind this type of P2P lending service is to cater to the vast underserved market.

Transforming The Small-Business Lending Customer Experience: Kabbage CEO Rob Frohwein (Forbes) Rated: A

In the intervening years since Frohwein and his friends, Marc Gorlin and Kathryn Petralia, started Kabbage “with an idea and a misspelling of cabbage” (a slang term for money), it’s gone on to fund more than 150,000 small businesses, representing a wide variety of industries, with over $5 billion of working capital. And in that time, the goal has evolved, says Frohwein, to “never allowing you to go below zero.” What he means by this is “to keep entrepreneurs away from that pit-of-the-stomach feeling, which I know as a former small business owner myself: Deciding whether to pay vendors first, or make payroll, or invest in marketing, and knowing you need to do all three but it’s going to kill you because your cash flow just isn’t working out. It’s here that Kabbage can step up and help.”

Micah Solomon, Forbes:  I’m interested in how you went about pushing back against the traditional customer experience norms in lending.

Rob Frohwein, Co-Founder and CEO, Kabbage, Inc.: Everyone knows that banks have been underserving small business customers, but our transformational moment came from asking “why?”. It turns out that a large part of the reason is the costly, manual processes that make underwriting small business loans time-intensive and unprofitable. Kabbage’s technology quickly analyzes the live business data of a small business and fully automates the underwriting process, so businesses get an answer and access to capital in minutes, not weeks or months.

And for Kabbage? What’s next for you.  

Another internal saying here is “Let the bakers bake.” A baker didn’t start their business to deal with back-office financing all day long. They want to serve their customers and perfect their craft. We’re in the business of giving small businesses back more time in their day and to remove unneeded friction.

Startup’s mission: Help cash-strapped students finish college (American Banker) Rated: A

Harvard MBAs who want to refinance their student debt have numerous options, including the online lenders SoFi and CommonBond. Ivy Leaguers who need a loan to get through college also have choices, including Discover and Wells Fargo.

But low- or moderate-income students who do not have relatives with sound credit who can co-sign have few options for obtaining the financial help they need to complete college. Many of them are women, who hold nearly two-thirds of outstanding student debt in the U.S. — almost $900 billion as of mid-2018.

Fintech Crowd Dives Into Subprime Credit-Card Lending (The Wall Street Journal) Rated: A

Facing rising loan losses, especially among the riskiest borrowers, banks are reining in their growth in this sector. Subprime credit-card balances at seven large U.S. banks rose 3% in the first half of the year from a year prior, down from a 13% increase in the year-earlier period, according to Autonomous Research. Capital One Financial Corp.’ssubprime balances accounted for 32% of its domestic credit-card balances in the first half of 2018 compared with 36% in the same period a year earlier

Capital One has around $32 billion in subprime credit-card balances on its books.

The new entrants say their use of machine learning and artificial intelligence for underwriting helps them manage the risk. They also mostly extend small credit lines, often ranging between $500 and $2,000, limiting the scale of potential losses.

Around 60 million U.S. adults have credit scores lower than 650, according to Fair IsaacCorp. , roughly the threshold where banks focused on prime borrowers stop lending. Some 53 million U.S. adults don’t have credit scores at all because they have little or no borrowing history.

Q2 Holdings To Acquire Cloud Lending For Lending And Leasing Platform (Seeking Alpha) Rated: B

Q2 Holdings (QTWO) has announced it has agreed to acquire Cloud Lending for $105 million plus contingent earn-outs.

Cloud Lending has developed cloud-based software for the financial lending and leasing industry.

QTWO is acquiring Cloud Lending for its next generation web-based system and complementary capabilities and geographic customer base.

The San Mateo, California-based Cloud Lending was founded in 2012 to develop and operate a cloud-based peer to peer lending and leasing platform.

Roostify Announces Roostify Adapt Functionality to Extend Branding and Customization Options for Enterprise Lenders (Business Wire) Rated: B

Roostify today announced the release of Roostify Adapt. An easily configurable feature for lenders with complex workflows, Roostify Adapt allows for real-world process management while maintaining the power of primary and secondary (“parent/child”) accounts within the Roostify digital lending environment.

United Kingdom

Higher rates will help us, says Funding Circle after divi cut (Citywire) Rated: AAA

Peer-to-peer lending lending investment trust Funding Circle(FCIF) is expecting rising interest rates to help boost its yield after hedging costs forced a dividend cut.

After launching in 2015, the peer-to-peer fund had offered a 6.5p annual payout but in June it was forced to cut its target dividend range to between 5p and 6p for the next 12 months.

That equates to a forward yield of between 4.9% and 5.8% based on the current 102.8p share price.

ZOPA: UK investors more likely to hate Marmite (Peer2Peer Finance) Rated: AAA

INVESTORS in the UK are more likely to hate Marmite than average, according to new research.

A survey commissioned by peer-to-peer consumer lender Zopa showed that 50 per cent of UK investors dislike Marmite, compared to the national average of 33 per cent.

The research, which polled 2,000 people with an investment of at least £2,000, found a number of other quirky traits.

This included a preference for blue cars, which are owned by 20 per cent of investors, and a love of listening to Radio 2.

Here Are The U.K. Companies That Will Be Unicorns In 2019 (Forbes) Rated: AAA

There are 

Wonga investors raise £10 million to save company (Isreal National News) Rated: A

Payday loan giant Wonga.com has received a £10 million cash injection from its investors to avoid going into administration. The controversial company was once hailed as the fastest growing company in Europe and had plans for a £1 billion flotation. However, the firm has faced difficulties after a surge in compensation claims and a regulatory clamp-down on the high-cost loans industry.

The company had a variety of backers including Israeli investors – but emergency fundraising in the last few weeks caused their original investors of Accel Partners and Balderton Capital to offer a bailout solution.

P2P Lender Welendus Returns to Seedrs to Raise £850,000 (Crowdfund Insider) Rated: A

Short-term peer-to-peer lending platform Welendus has returned to equity crowdfunding platform Seedrs to raise £850,000 in funding. The lender’s latest initiative comes less than one year after it secured £208,898 through the funding portal.  

Welendus also reported that for investors its enables them to invest in short-term loans, offering higher returns with the short-term investment flexibility and the benefit of a Provision Fund.

Exploring the effect of the FCA crackdown on P2P and crowdfunding (AltFi News) Rated: A

The growth of P2P lending and its positive effect on the UK economy cannot be disputed. Initially starting out as a curiosity during the depths of the financial crisis in 2008, P2P lending has grown from £300 million in funds being lent in 2011 to a huge £4.6 billion in 2016.

China

Preview: China Rapid Finance Q2 Earnings (Benzinga) Rated: AAA

On Wednesday, China Rapid Finance XRF 4.86% will release its latest earnings report. Decipher the announcement with Benzinga’s help.

Earnings and Revenue

Wall Street analysts see China Rapid Finance reporting a loss of 13 cents per share on revenue of $30.88 million.

China Rapid Finance EPS in the same period a year ago came in at a loss of 29 cents. Revenue was $15.16 million. Revenue would be up 103.67 percent on a year-over-year basis.

Victims of P2P Lending Crisis in China Speak Out About Misfortunes (The Epoch Times) Rated: AAA

Yindou had a loan balance of 4.4 billion yuan (about $640 million) as of the end of June, according to Yicai, a major Chinese business newspaper. After Yindo suspended its operations in July, the company’s investors were left without the ability to withdraw their investments.

Since the platform closed, Yindou investors have turned to the bank in hopes of collecting their investments back.

Recently, victims of another financial product apparently gone wrong have taken to the streets. This year, a total of 170 private funds, 70 percent of which are private-equity or venture-capital funds, have failed or closed without explanation. This has led to many protests, most notably in Beijing on Aug. 7, where local police turned away protestors before they could make their case to China’s bank regulator, the Banking Regulatory Commission (CBRC).

Meanwhile, China’s M2 money supply, or the total savings of companies and residents, increased more than a hundredfold from 1990 to 2017, according to He, at a rate faster than the growth of GDP. While a steady money supply, or credit, can fuel an economy’s growth, such excessive credit, in relation to the GDP, can fuel bubbles and cause inflation.

Regulatory Reorganization Crucial to Health of Financial System (Caixin Global) Rated: A

The merging of the China Banking Regulatory Commission (CBRC) and the China Insurance Regulatory Commission into the China Banking and Insurance Regulatory Commission (CBIRC) naturally has attracted a lot of attention outside of China as it involves major changes across two important areas of finance.

Yet perhaps the most important thing is how this will change the relationship between regulators and the central bank, the People’s Bank of China.

Fifteen years ago, responsibility for supervising and regulating banking institutions was taken from the central bank and given to the then-newly formed CBRC. This development had far-reaching consequences, and led to the rebuilding of the previously inefficient financial regulatory model into a comprehensive and professional banking system that is in line with international standards. State-owned banks were also commercialized around this time.

Protests Mark China’s Ruptured P2P Lending Landscape (PYMNTS) Rated: A

China’s peer-to-peer (P2P) lending crisis has caused widespread anger from citizens who are demanding that the government bail out hundreds of collapsed P2P companies. Last week, it was reported that China ordered a lockdown of Beijing’s financial district to prevent individuals from protesting a crisis in the P2P lending marketplace.

The size of China’s P2P industry is bigger than in the rest of the world combined, with outstanding loans of 1.49 trillion yuan ($217.96 billion USD). The industry was nearly unregulated and at its peak in 2015, when there were about 3,500 P2P businesses in the country. However, a combination of regulatory failures, fraud and the declining debt is being blamed for the shuttering of 243 online lending platforms since June.

China’s multi-front economic war dulls direction (Asia Times) Rated: A

Chinese stocks were at the bottom of the Emerging Asia pack into August, down 20% in local-index terms, as the so-called “trade war” with Washington added another 25% mutual tariff blow on tens of billions of dollars’ worth of goods.

The International Monetary Fund urged a negotiated settlement as it predicted only “limited direct impact” on the Chinese economy, shaving growth by half a percentage point under a medium-case scenario, while holding to this year’s 6.6% forecast. However, the IMF also warned that credit expansion was unsustainable and that tighter global financing conditions posed “downside risk,” as the renminbi continued its 10% slide since April.

However, the US-China exchange-rate and trade regimes now closely overlap as an overhang on “A” share consideration, despite China’s 30% slice on the benchmark MSCI Index, with a clean resolution of cross-cutting issues unlikely to offer recovery prospects in the coming months.

European Union

Lower Interest Rates on Mintos – How do Investors React? (P2P Banking) Rated: AAA

Compared to the beginning of July the interest rates for newly issued EUR loans on Mintos are much lower now. While investor enjoyed interest rates of up to 13-14% for loans issued in the first half of the year, typical rates are 8-11% now, with a 12-13% for more exotic loans mixed in.

To find out how investors reacted to the situation P2P-Kredite.com conducted a survey among German speaking Mintos investors. Here are the preliminary results (48 respondents):

  • 35% say they withdraw univested cash and invest it on other p2p lending platforms
  • 21% say they continue to invest on Mintos primary market
  • 17% say they just wait, the interest rates will rise again
  • 15% say they withdraw unimvested cash and invest it in other asset classes (e.g stock)
  • 12% say they buy on the Mintos secondary market now, instead of using the primary market
International

Banks and Retailers Are Tracking How You Type, Swipe and Tap (The New York Times) Rated: AAA

The way you press, scroll and type on a phone screen or keyboard can be as unique as your fingerprints or facial features. To fight fraud, a growing number of banks and merchants are tracking visitors’ physical movements as they use websites and apps.

Some use the technology only to weed out automated attacks and suspicious transactions, but others are going significantly further, amassing tens of millions of profiles that can identify customers by how they touch, hold and tap their devices.

The data collection is invisible to those being watched. Using sensors in your phone or code on websites, companies can gather thousands of data points, known as “behavioral biometrics,” to help prove whether a digital user is actually the person she claims to be.

When clients log in to their Royal Bank of Scotland accounts, software begins recording more than 2,000 different interactive gestures. On phones, it measures the angle at which people hold their devices, the fingers they use to swipe and tap, the pressure they apply and how quickly they scroll. On a computer, the software records the rhythm of their keystrokes and the way they wiggle their mouse.

Asia

Funding Societies Hits SGD200 Million in SME Crowdfunding (Funding Societies) Rated: AAA

Funding Societies surpassed the SGD 200 million mark in total crowdfunded SME loans. This achievement came just 6 months after crossing SGD 100 million in January this year. In the same period, its investor base has also increased from about 40,000 to 75,000, indicating strong demand from investors to support local SMEs while diversifying their investment portfolio.

Chinese P2P Lender Hexindai Announces Equity Stake Acquisition in Indonesian Online Lending Platform Musketeer (Crowdfund Insider) Rated: A

Chinese peer-to-peer lending platform Hexindai (NASDAQ:HX) announced on Tuesday it has entered into definitive agreements to acquire a 20% equity stake in Musketeer Group Inc., an Indonesian online lending platform that offers consumption installment loans, for approximately $1.6 million, and simultaneously completed the acquisition. 

MENA

The Impact Of The Middle East’s Fintech Boom On Economic Inequality In The Region (Entrepreneur) Rated: AAA

The past decade has shown that fintech can be a powerful force for equality. Blockchain, data analytics, and mobile phone technology are evolving at breakneck speed and have shown potential to bridge the gap between the rich and the poor. Safaricom’s mobile-money platform, M-Pesa, reaches an estimated 96% of households in Kenya, and is credited with lifting at least 200,000 Kenyan households out of poverty. The Indian mobile wallet, PayTM, has nearly 200 million users, including women and rural families that can now participate in the digital economy. Will the Middle East produce companies of the same caliber and social impact? There is certainly an opportunity, thanks to three factors.

The first factor is necessity. The Middle East is in dire need of ideas to bridge the massive gulf between the rich and the poor. The region leads the world in economic inequality, where the top 10% of the population enjoy about 60-66% of the region’s income. 86% of the adult population is underbanked, which means they don’t have access to services at formal financial institutions. This provides a tremendous market opportunity.

Square And MetLife Watch Out: Two Fintech Startups Target T Markets (Forbes) Rated: A

Lending Express, a Tel Aviv-based platform founded in 2016 that connects small businesses with lenders, is hoping to expand the market for small business loans. As CEO Eden Amirav explained in an August 13 interview, Lending Express — which has raised $2.7 million in seed capital — has grown from under 10 people in October 2016 to 25 — mostly in Tel Aviv with a business development office in San Francisco.

Lending Express did not disclose its revenues but it seems to be growing. As Amirav said, “We currently work with more than 30 leading lenders and FinTech partners, and have facilitated $65 million in SMB loans funded through our platform. Since we began operations in the US in the last quarter of 2017, and thereafter almost every quarter, we have doubled the number of loans we facilitated the previous quarter and 46% of all loans we’ve helped close happened in the second quarter of 2018.”

Lending Express sees tremendous potential for SMB lending outside of traditional banks. Amirav estimates that a mere 1% of the $1 trillion in total SMB loans — or $10 billion — is offered by alternative lenders like Lending Club and On Deck.

Authors:

George Popescu
Allen Taylor

Friday April 6, 2018 Daily News Digest

Friday April 6, 2018 Daily News Digest

News Comments Today’s main news: SoFi to roll out deposit accounts, debit cards next month. PeerStreet raises $29.5M. Welendus loanbook hits 100K GBP in 3 months. Weidai plans $400M IPO. Instamojo to expand into SME lending. Today’s main analysis: Banks slow fintech investment, revert to their own digital infrastructure plans. Today’s thought-provoking articles: Credit bureaus aren’t going anywhere yet. Blockchain […]

Friday April 6, 2018 Daily News Digest

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

SoFi Plans to Start Rolling Out Deposit Accounts Next Month (Bloomberg), Rated: AAA

Social Finance Inc. said it will start offering deposit accounts and debit cards to some customers next month, the first major new product under Chief Executive Officer Anthony Noto.

The San Francisco-based company is looking to branch into various financial services as Goldman Sachs Group Inc. ratchets up pressure on SoFi’s profitable center of personal loans. The startup unveiled a banking-like product, called SoFi Money, in January and began accepting applications to a waiting list.

Majority of Millennial Women Have Money to Invest, But Fear Holds Them Back (Markets Insider), Rated: A

The biggest driver of the investment gap between men and women isn’t knowledge or other financial obligations, but fear, according to a new study by SoFi and professional networking site Levo League (Levo).

However, while millennial women are extremely active in managing their financial status, and over 50%+ have the means to invest each month, the study found the majority of millennial women do not to invest due to fear (56%). Furthermore, the study results indicated the top two reasons why millennial women do not invest is because they don’t know where to start (25%+) and because they are paying down their debt (25%+).

Credit bureaus aren’t going anywhere. For now (American Banker), Rated: AAA

The breach of personal data on more than 143 million customers Equifax revealed in September was followed in mid-March by the news that an executive insider-traded stock before the public was notified about the breach. This week, Equifax acknowledged it had sent erroneous breach notification letters to an undisclosed number of people.

 

 

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

Lenders offered personal loan borrowers less money than they did last month, while offered APRs were mixed. Rate and loan amount offers varied widely among consumers, depending on factors including, but not limited to, credit score, income, and current debt obligations.

Excellent credit (760+ score): Offered APRs to consumers with a credit score of 760+ averaged 7.42% in March.

  • The average best APR offered to all borrowers with credit scores of 760 or above was 7.42%, a decrease of 2 basis points from the prior month, and down 22 basis points from the same period one year ago.
  • At $22,644, the average loan amounts offered with the best APRs to all borrowers with a score of 760 and above was down 4.61% ($1,045) from February, but up over 17.60% ($3,986) 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 $35,669. A borrower with this APR and loan amount would save $3,021 by consolidating debt with a 10% APR over a three-year term.

Good credit (680 – 719 score): Offered APRs to consumers with a credit score between 680 and 719 averaged 15.89% in March.

  • The average best APR for all borrowers with credit scores of 680 – 719 was 15.89%, up 20 basis points from last month and 139 basis points from a year earlier.
  • At $15,993, borrowers with scores of 680 – 719 saw the amounts offered with the best APRs decrease by 175 basis points ($279) in the last month, but increased by 242 basis points ($386) from March 2017.
  • The top 10% of offers, presented to borrowers with the best profiles within the 680 – 719 credit score range, had an average best APR of 7.00%, offered with an average loan amount of $23,822. A borrower with this APR and loan amount would save $3,250 by consolidating debt from a 15% APR over a three-year term.

The most common reasons for seeking a personal loan are credit card refinancing and debt consolidation. These two categories comprise 63% of all loan inquiries.

Source: Lending Tree
Source: Lending Tree

LendingTree Mortgage Offers Report – March 2018 (LendingTree), Rated: AAA

  • March’s best offers for borrowers with the best profiles had an average APR of 4.25% for conforming 30-year fixed purchase loans, up from 4.22% in February. Refinance loan offers were up 11 bps to 4.24%. Mortgage rates vary dependent upon parameters including credit score, loan-to-value, income and property type.
  • For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were up 5 bps to 4.85%. The loan note rate hit the highest since March 2016 at 4.75% and was also up 5 bps from February. We prefer to emphasize the APR as lenders often make changes to other fees in response to changing interest rates.
  • Consumers with the highest credit scores (760+) saw offered APRs of 4.72% in March, vs 4.99% for consumers with scores of 680-719. The APR spread of 27 bps between these score ranges was unchanged from February and still near the widest since this data series began in April 2016. The spread represents over $14,000 in additional costs for borrowers with lower credit scores over 30 years for the average purchase loan amount of $238,593. The additional costs are due to higher interest rates, larger fees or a combination of the two.
  • Refinance APRs for conforming 30-yr fixed loans were up 6 bps to 4.83%. The credit score bracket spread remained at 24 bps, amounting to nearly $13,000 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $239,668.
  • Average proposed purchase down payments were little changed at $62,758.
Source: Lending Tree

PeerStreet Raises $ 29.5 Million to Further Transform Real Estate Investing (Business Wire), Rated: AAA

PeerStreet today announced the close of a Series B funding round of $29.5 million to continue driving the company’s mission of democratizing access to real estate debt.

The Series B round was led by World Innovation Lab. Existing investors Andreessen Horowitz, Thomvest, Colchis Capital, Felicis Ventures, and others participated along with new investors Solon Mack and Navitas Capital. The raise will accelerate PeerStreet’s growth. Specifically, PeerStreet will be broadening the type of real estate loans it cultivates from its network of lenders and hiring more world-class talent.

RealtyMogul Closes $ 2.75 Million Equity Investment in Plano Multifamily Portfolio (Business Wire), Rated: A

RealtyMogul announced that it has completed an investment in a $11.9 million multifamily apartment portfolio in Plano, Texas, consisting of 156 units.

The property was acquired through a partnership with Comunidad Realty Partners, a dynamic real estate investment firm specializing in multifamily apartment communities in densely-populated Hispanic neighborhoods. Comunidad reports to have owned and managed over $600 million in multifamily assets overall, comprised of approximately 8,200 units. RealtyMogul has invested with Comunidad Realty Partners on five previous transactions.

Stripe launches a new billing tool to tap demand from online businesses (Tech Crunch), Rated: A

Stripe  has made its name by providing developers with a simpler way to start charging customers and handling transactions, but today they hope to take another step by launching a billing product for online businesses. That’ll allow them to handle subscription recurring revenue, as well as invoicing, within the Stripe platform and get everything all in the same place. The goal was to replace a previously hand-built setup, whether using analog methods for invoicing or painstakingly putting together a set of subscription tools, and make that experience as seamless as charging for products on Stripe.

While this is a tool that’s a natural fit for something like Stripe, it’s certainly one that’s created a substantial business opportunity. Last month, Zuora — an enterprise subscription services company — filed to go public amid a fresh wave of enterprise IPOs that included Dropbox and Zscaler (and also, to a certain extent, Salesforce’s big acquisition of Mulesoft). Zuora’s subscription services revenue continues to grow, showing that Stripe will certainly have competition here, but also that there’s a large market opportunity.

Enhancing the Business Value of Loan Pricing Systems (Loan Pricing Pro), Rated: AAA

Today, FinTech companies, marketplace lenders, traditional banking institutions and many other types of innovative new lending platforms are using loan pricing systems to sharpen their focus on balancing shareholder returns with customer pricing sensitivities and market demands.

The lending landscape is changing, but the need to achieve an adequate rate of return while delivering fair and accurate pricing, remains a constant.

Source: LoanPricingPro

Read the white paper in full here.

Five Ways for FinTech Lenders to Achieve ROI on a Loan Pricing System Investment (ProBank), Rated: A

There are a variety of strategies to consider ensuring attaining a reasonable return on your investment in a loan pricing system. We’ll cover each of these in the form of short case studies that we’ve taken from one or more of our existing clients’ actual experiences.

  1. Enhanced Loan Yield Quantitative analysis can be easily used to measure the effectiveness of the loan pricing system implementation on a pre-test / post-test basis. The technique used relies on the same Funds Transfer Pricing (FTP) methodology which a robust loan pricing system uses to calculate loan profitability. To illustrate this, we’ll use a recent client implementation of LoanPricingPRO at a $1 billion lender.
    Source: Probank Report
  2. Increased Collection of Loan Fees In today’s highly competitive environment with historically low rates and generally weak loan demand, loan fees are often sacrificed, or at least underutilized as a tool for increasing profitability. As a general rule, the shorter the loan term, the more powerful the impact of loan fees on loan profitability and ROE.
  3. Decline in Lost Opportunities-Lenders using LoanPricingPRO® usually have a higher batting average when measuring the number of new loan clients against the total number of requests received or applications taken.
  4. Active Portfolio Management-When implementing a loan pricing system with an interface to the organization’s core data systems, significant new reporting capabilities are attained. Lenders are able to receive reports on and track trends in loan officers’ portfolios.
  5. Improved Discipline, Accuracy & Pricing Consistency-As has been shown, it is possible for senior management teams and lenders working
    together and aided by an accurate and appropriately calibrated loan pricing system, to significantly improve the return performance and growth rate of the lending client base.

Read the full report here.

 

A Third of Americans Would Forfeit Their Voting Rights For a 10% Pay Raise, Says Study (Time), Rated: A

More than a third of Americans would give up their right to vote for a 10% annual pay raise, according to a new survey.

The peculiar findings come from a survey conducted by LendEDU, an online student loan marketplace, that polled 1,238 working Americans. In exchange for the hypothetical pay bump, about 35% of these employees said they would sacrifice their voting rights for life. In addition, just over 9% of respondents said they would give up their children’s (or future children’s) right to vote for life for the make-believe raise.

But those aren’t the only big sacrifices the respondents would make for a 10% annual salary increase. More than 12% said they would break up with their partners, and nearly 19% said they would give up their health insurance for the next five years. Forty percent would forfeit their dental care for five years for a raise, and nearly 18% would say goodbye to their Social Security benefits.

Source: Lend EDU

DepositAccounts.com Releases 2018 Top 200 Healthiest Banks and Credit Unions in America (Benzinga), Rated: A

DepositAccounts.com, a subsidiary of LendingTree, today released its list of the 2018 Top 200 Healthiest Banks and Credit Unions in America.

Source: Deposit accounts

If You Can’t Beat Them, Join Them — How Banks, Fintech And Tech Players Can Win Together (Forbes) Rated: A

As tech giants like Amazon, Facebook and WeChat set out on their quest to be all things to all people, eroding the boundaries between industries, banks that want to maintain and grow their market share need to rethink the rules of competition.

While a growing number of banks have acquired fintechs to avoid fading into the background (

12 Best Bank of America Personal Loan Alternatives (Student Loan Hero), Rated: A

Bank of America offers various loans — but not personal loans

Bank of America’s loans, however, are limited to two specific types:

Some online lenders with competitive interest rates on personal loans include:

LendingClub and Prosper, for example, are both in the peer-to-peer lending space. LendingClub has fixed personal loan rates ranging from 5.99% – 35.89%. You’ll need to check your rate with Prosper directly since it varies depending on your credit and borrower profile.

Marlette Funding Welcomes a New Advisor with a Focus on Innovation (LendEDU), Rated: B

Marlette Funding, LLC, recently appointed Marshall Lux as an advisor to its board of directors and company. Marlette Funding is the parent company of Best Egg, which is a lending platform that offers unsecured personal loans.

Jeffrey Meiler, chief executive officer of Marlette Funding, said Lux’s considerable experience in financial services and his expertise in the consumer market make him a good fit for the company.

FinTech Veteran Ethan Schwarzbach Joins inFactor To Head inFactorIQ Platform (PR Newswire), Rated: B

inFactor Corp, an integrated financial technology company providing liquidity solutions across the spectrum of non-bank lending, has announced today that Ethan Schwarzbach has joined the company to head up the company’s new inFactorIQ platform.

Mr. Schwarzbach joins inFactor from Orchard Platform where he most recently served as a Manager on the Business Development team. Orchard Platform is the leading provider of data, technology, and software to the online lending industry.

SOLO FUNDS ALLOWS YOU TO SEAMLESSLY BORROW FROM YOUR PEERS (Black Enterprise), Rated: B

According to a recent statement, SoLo’s founders uniquely understood the plight that American workers were facing every day because they too were once in their shoes. It is not uncommon to seek a small loan from friends and family, but the founders were not seeing a quick and easy lending solution to help facilitate the process.

Traditional banks don’t lend small dollars, and payday lenders charge excessively high interest rates that for many in emergency situations are almost impossible to pay back. There was simply no affordable way to get a small dollar loan. The team thought that the limited resources for small-dollar loans only plagued the minority communities like the ones they were raised in, but that was wrong; they discovered a more mainstream problem. According to the statement, 78% of American workers live paycheck to paycheck and 47% of the country can’t cover a $400 emergency expense without borrowing from someone else or selling a personal asset.

Liquid FSI Adds Key Board Member (deBank), Rated: B

Liquid FSI, a direct lender and creator of the Convert2Pay platform, which provides on-demand payment for medical invoices, added Barry Blecherman to its Board of Advisors.

While a few recent graduates of the NYU Tandon School of Engineering were helping the Liquid FSI team with some algorithms for their technology platform, they mentioned Blecherman, a professor of Finance and Risk Engineering at the Tandon School.

United Kingdom

Welendus loanbook hits £100,000 in just three months (Peer2Peer Finance News), Rated: AAA

WELENDUS investors have funded £100,000 of short-term loans in just three months of its beta stage, the platform has announced.

Nadeem Siam (pictured), founder of the platform, says a full launch of the product is planned soon but Welendus has already built up more than 4,000 users.

Klarna: 53% of retailers say “always on” sales are damaging profits (Tamebay), Rated: A

Research by payments provider Klarna shows that discounting is no longer confined to the traditional winter and summer sales. The new rules of retail mean discounting has become a fluid and unpredictable phenomenon with over half (57%) of consumers expecting regular sales.

The research of 500 British retailers highlighted the negative impact this can have on the bottom line of merchants. Over half of retailers surveyed (53%) say the “always on” nature of sales is having a negative impact on profits – 11% said discounting cost them over £25,000 throughout 2017. This isn’t felt just by smaller retailers, but merchants of all sizes – in fact, it’s those with 100-239 employees that feel the burden most with 66% saying constant discounts are impacting profits.

Investing Show: What you need to know about crowdfunding, peer to peer, and Innovative Finance Isas (This is Money), Rated: A

Stewart Cazier, of alternative lending platform Thincats, details what investors need to know about peer to peer, crowdfunding and Innovative Finance Isas on the Investing Show.

He explains to Simon Lambert, of This is Money, and Richard Hunter, of Interactive Investor, how alternative lending works, what investors need to consider, how to diversify and why it’s important not to consider it risk-free or put all your eggs in one basket.

Five questions for: Samantha Bamert, CEO of AskIf (Money Week), Rated: A

Ask Inclusive Finance (AskIf) is a commercial enterprise with an ambitious social mission – to close the sizeable funding gap for loans to financeable small companies unable to secure funding from banks. Smaller estimates suggest this funding gap could be upwards of £2.2bn per year.

Other research estimates much larger numbers. AskIf is a platform lender bringing together funders, a network of lending partners and the borrowers themselves. By providing support and funding to small companies, we’ll enable job creation, economic value and opportunity in many communities across the UK.

JP Jenkins – Continued New Initiatives (PR Newswire), Rated: B

JP Jenkins reports that its co-owner, Peterhouse Corporate Finance, has closed its 200th capital raise in the past three years, with a total funding of circa £200m for smaller growth companies.

Significant new capital has recently been provided by Malcolm Burne, a substantial shareholder and Executive Director, to expand the JPJ franchise further. The Company has also entered into partnership & collaborative agreements with US Capital Partners, private placements, Equidate a US private companies Stock Market, and Primary Markets an International Unlisted Exchange.

China

Chinese Online Lender Weidai Plans $ 400 Million IPO (Bloomberg), Rated: AAA

Chinese peer-to-peer lender Weidai Hangzhou Financial Information Service Co. is planning an initial public offering that could raise about $400 million, according to people with knowledge of the matter.

There hasn’t been a major listing of a Chinese financial technology company in the U.S. or Hong Kong since LexinFintech Holdings Ltd., which raised $124 million in a downsized U.S. IPO in December, according to data compiled by Bloomberg. Qudian Inc., which completed a $1 billion IPO in October, has since fallen 52 percent from its offer price.

European Union

Insurance and the Open Banking wave: seven use cases (Holland Fintech), Rated: A

Source: Holland Fintech

INNOPAY has defined a first set of use cases for insurance companies. The use cases have been mapped on the most important value levers for insurance to capture relevancy and see where exactly the use cases drive value. The mapping is presented in figure 1 and a first description of the cases is given below.

  1. New (cyber)insurance product for a new client segment: insure TPPs in PSD2 landscape: data sharing through third parties implies new (cyber) risks and thus accountability in case of data breaches.
  2. Better deal engines: PSD2 provides third parties access to payment account information data (AIS). This data can be mined and relevant insights on customer behaviour can be extracted. This behaviour can then be for example spending on insurance to see if a better offer can be made to the customer or looking for patterns which can imply a better risk profile and thus better pricing on insurance products for the customer.
  3. Improve personalised advice: next to mining, the data can be used to improve personalized advice. Although TPPs are by law only allowed to present the account information of customers, insurance companies can use that information to give advice about their financial situation.
  4. Optimise claims management: together with other data sources, account information that is shared by customers’ banks can be used to create new data sets that could be used to improve reconciliation and reimburse the right amount to customers and gain better insights on possible fraud (by looking at for example customer spending patterns).
  5. Up to date customer records: although there is no Open Banking standard yet and all banks are developing their own view and strategy on opening up data beyond PSD2 compliance, there are already good examples insurance companies can build upon.
  6. Expanding service proposition to providing accounts: with the possibility to execute a transaction (PIS) on behalf of the customer or to check available funds (CAF) the functional scope of PSD2 is limited.
  7. Digital identity verification: banks can help in identifying a person during a digital onboarding or digital identity verification process. This functionality is for example already operated by the banks in The Netherlands under the iDIN scheme.

Swiss Crowdlender Banks on Blockchain (Finews), Rated: B

A Swiss crowd-lending platform is using the blockchain technology to improve the way it brokers loans to companies. It will also introduce tokens as a currency of valuation.

Swisspeers, a Winterthur-based platform specialized in loans to small- and medium-sized companies is registering transactions on the Ethereum blockchain. The company is going to use the so-called Smart Contract developed specifically for its purposes, Swisspeers said on Thursday.

International

Not just dumb pipes: Fintech investment slows as banks try to gain back control (Tearsheet), Rated: AAA

Banks’ investment in fintech companies is slowing down as they refocus on improving core banking infrastructure, according to a report by CB Insights.

The Banks in Fintech report, released this week, found that banks have been foregoing big investments and partnerships over the past five quarters with a preference for building products in house — particularly in lending, payments and personal financial management. In both the U.S. and Europe banks spent more of their architecture investment dollars on capital markets software companies than blockchain startups.

Source: CBInsights

KPMG’s Pulse of Fintech report for the fourth quarter of 2017 noted that while deal activity among venture capital and private equity firms remained steady compared to 2016, the earliest stage of VC financing could see fewer deals and a volume decline in particular segments like online lending in the coming year. It’s a sign of the industry’s maturity; banks are showing their efforts to “fight fintech with fintech,” Lindsay Davis, an intelligence analyst at CB Insights, said in a presentation.

Source: Tearsheet

Blockchain Integration Is Leading to a Revolution in Global Trade (The Market Mogul), Rated: AAA

In every step of the trade financing process, blockchain technology seems to offer an efficiency boost in commodity transactions and the global supply chains. From contract generation level, which includes time-consuming reviews of the operation by the Letter of Credit issuing bank, to the settlement level, which often proves problematic due to payment platform incompatibility, fintech offers smart solutions.

Although credit fintech is on the rise, blockchain was mostly used for peer-to-peer lending and that the trade financing gap persists, according to the Asian Development Bank. 70% of financial institutions which responded to the survey claimed that the technology would allow for greater exposure to SME risk, mostly because of significant cost reduction in compliance and due diligence.

Mambu unleashes digital marketplace (Fintech Futures), Rated: A

Software-as-a-Service (SaaS) banking engine provider Mambu has launched its digital marketplace to offer cloud-enabled apps, products and tools for banking and lending.

Mambu Marketplace offers a choice of global and localised solutions which can be integrated with the SaaS engine. Its offerings are based on an API-driven architecture.

Will fintech realize its potential for financial inclusion? (LinkedIn), Rated: A

But it’s increasingly clear that many of the financially underserved are also technologically underserved. The GSMA’s Mobile Economy 2018 reports that nearly 40% of the world’s 5 billion mobile subscribers have no internet access; most of the offline, live in the low- and middle-income countries that could benefit the most from digital financial services. Many mobile subscribers live outside of 3G or 4G signal range, which slows service or limits what they can do with their devices. Many unconnected users must contend with poor network performance, high connectivity and handset costs, poor digital literacy, or a lack of locally relevant content.

Digital lending innovations: Small businesses face a $5 trillion financing gap. Inefficiencies in customer acquisition and analysis prevent lenders from making reliable lending decisions and entrepreneurs from getting the financing that they need. But new technologies and data sources can help small businesses: Mexico’s Konfio analyzes thousands of data points – including biographic information, financial history, electronic invoicing, and social media usage – to make lending decisions quickly and inexpensively.

India

Instamojo plans to expand into SME lending, logistics: CEO Sampad Swain (Livemint), Rated: AAA

Online payment solution provider Instamojo Technologies Pvt. Ltd plans to expand into business loans, logistics and advertising services for small merchants, as more small and medium enterprises (SMEs) turn to digital means to sell and market their product, a top company executive told Mint.

Bengaluru-based Instamojo, which focuses primarily on SMEs, currently has 400,000 SMEs using its payment service, and it is also targeting to onboard at least 1 million SME customers by the end of FY19, the company’s chief executive Sampad Swain said in an interview.

Peer to Peer (P2P) Lending – a Niche in the Financial Ecosystem (PR Newswire), Rated: A

Investment avenues are available either in the form of instruments per se (e.g. equity stocks, bonds, etc.) or as vehicles for participating in the instruments e.g. Mutual Funds, Portfolio Management Services, Alternate Investment Funds, etc. Some of the vehicles are available in small ticket sizes, e.g. Mutual Funds, whereas some require a sizable ticket e.g. PMS (Rs 25 lakh) or AIF (Rs 1 crore). There is a differentiated investment avenue, which is neither a tradable instrument nor a structured vehicle, but a facilitator for retail investors. This is called Peer to Peer (P2P) Lending where there is an online intermediary, which brings the lender and borrower together to facilitate direct lending by the lender to the borrower on mutually agreed terms. This is an online marketplace where the digital platforms like e.g. IndiaMoneyMart would conduct due diligence and credit assessment of the borrower and connect the two individuals.

Asia

Outsmarting the traditional experts with the aid of AI (Asia Asset Management), Rated: A

FinEX Asia offers Asian investors access to US consumer credit assets

Asian institutional investors often find it difficult to gain exposure to US consumer credit assets because of the diverse array of such products and a lack of investment channels.
Canada

Canadian Fintech PayBright Announces  E-Commerce Financing Solution is Now Available on IBM Websphere (Crowdfund Insider), Rated: AAA

Canadian fintech lender PayBright announced on Thursday its e-commerce financing solution is now available for merchants operating the IBM Websphere Commerce platform.

According to PayBright, the e-commerce solution integrates with merchant’s e-commerce platforms and provides Canadian customers with an additional payment option at checkout. Upon selecting PayBright as a payment method, customers can finalize their purchases in a matter of seconds. Merchants then receive their funds directly from PayBright the next business day with no credit risk. Customers then pay for their purchases in affordable monthly installments over time, with interest rates as low as 0%. 

Authors:

George Popescu
Allen Taylor

Wednesday March 21 2018, Daily News Digest

fintechs

News Comments Today’s main news: Mike Cagney’s Figure is out of stealth. CommonBond raises $50M. Airbnb features RealtyShares as multifamily financing solution. Monzo hits 500K current accounts. LexinFintech falls short on Q4 earnings. N26 raises $160M. Today’s main analysis: Mortgage Rate Competition Index widens. Today’s thought-provoking articles: The death of cash could be overstated. The most popular cities for millennial homebuyers. The […]

fintechs

News Comments

United States

United Kingdom

China

European Union

Other

News Summary

United States

Ex-SoFi CEO Mike Cagney’s new startup, Figure, is out of stealth (Fast Company), Rated: AAA

SoFi cofounder Mike Cagney, who resigned as CEO last year, has been quietly working on a new project involving home improvement financing and home equity lines of credit (HELOCs) for the last several months. Now, that project is out of stealth, with a live website: Figure.com.

According to Cagney’s LinkedIn profile, the startup plans to leverage blockchain-based technology and AI “to unlock new access points for consumer credit products that can transform the financial lives of our customers.”

The death of cash might be overstated (Business Insider), Rated: AAA

The decline of cash in the US might be exaggerated, according to Cardtronics and PYMNTS’ Global Cash Index (GCI).

Cash still sees healthy usage in the US: The share of cash in 2016 accounted for 12.6% of the country’s gross domestic product (GDP), and the study forecasts that it will account for 11.2% of the US GDP by 2021.

Here are three factors that might contribute to the endurance of cash in the US:

Source Business Insider

Cash persists for low-value transactions. Nearly two-thirds of US consumers said they prefer to rely on cash for purchases of $10 or less. That could be partly because it’s expensive for merchants to accept card payments, which leads to card transaction minimums that encourage cash usage for these purchases. This could help keep cash alive in consumers’ day-to-day lives.

Des Moines, Pittsburgh and Buffalo Among Most Popular Cities for Millennial Homebuyers (PR Newswire), Rated: AAA

LendingTree has released the findings of its study on the most popular cities for millennial homebuyers.

Young homebuyers are at the forefront of an increasing number of buyers returning to the housing market. The largest single-age population in the U.S. is 27-year-olds at almost 4.8 million, suggesting that millennials’ influence on the housing market has years to run before it peaks.

Millennial homebuyers make up one-third of mortgage requests. 32.5 percent of all mortgage requests through LendingTree between Feb. 1, 2017 and Feb. 1, 2018 came from consumers 35 years and younger. The average loan amount requested from this age group is $166,863.

Where millennials aren’t vying for homeownership. At the other end of the scale, Sarasota, Fla.Fort Myers Fla. and Honolulu had lowest shares of millennial buyers at 17.9 percent, 19.8 percent and 21.8 percent respectively.

Source: Lending Tree

CommonBond Secures $ 50M Series D Equity Round, Led by Fifth Third Bancorp (MarketWatch), Rated: AAA

CommonBond, a leading financial technology company that empowers students and graduates to pay for higher education, today announced a $50M Series D financing round.

Fifth Third Capital Holdings, LLC, a wholly-owned subsidiary of Fifth Third BancorpFITB, -0.69% led the round, with First Republic Bank FRC, -0.49% and Columbia Seligman Investments also participating, in addition to existing investors including Neuberger Berman, August Capital, and Nyca Partners. Individual investors in CommonBond include Vikram Pandit, former CEO of Citigroup, and Tom Glocer, former CEO of Thomson Reuters. This latest round brings CommonBond’s total funding raised to over $130M. CommonBond will use this new funding to accelerate its growth and invest further in technology.

Airbnb Features RealtyShares as First Multifamily Financing Solution (Business Wire), Rated: AAA

RealtyShares, a leading online marketplace for commercial real estate investing, today announced it is featured by Airbnb as a financing resource in its Multifamily Properties Toolkit, a website that gives owners, operators and developers of multifamily buildings resources to support long-term tenants who wish to share their space with travelers. RealtyShares provides experienced multifamily building owners and operators financing to buy, refinance, and renovate their buildings.

Landlords can now manage Airbnb activity in their buildings and share in the additional rental income with the Airbnb Friendly Buildings Program. As a result, multifamily property owners have become increasingly interested in helping their tenants improve and share their space on Airbnb.

OnDeck Appoints Kenneth Brause As New Chief Financial Officer (Crowfund Insider), Rated: A

Online lending platform for small businesses OnDeck (NYSE: ONDK) announced it has appointed Kenneth Brause as its new Chief Financial Officer, effective March 26th, as part of a mutually agreed upon transition process. The lender reported that current Chief Financial Officer, Howard Katzenberg. Katzenberg will serve as an advisor to OnDeck until April 13th, working closely with Brause to facilitate a smooth transition.

According to OnDeck, Brause brings more than 30 years of experience in the financial services industry to the lender’s team.

 

 

Average Cost of College Statistics for 2018 (Lend EDU), Rated: AAA

No matter whether you attend a public or private school, or whether you attend a 2-year or 4-year college, you can expect to pay more than those who attended before you.

By checking out the graph to the right (which does​ not account for inflation) you can see that in the past 20 years, tuition at all types of colleges has more than doubled, and in some cases has more than tripled.

Source: Lend EDU

Though the graph does not account for inflation, the rate of tuition increase has greatly outpaced the inflation rate – by at least 3 times for most school types.

The following is the average cost-of-attendance for the 2017-18 school year by school type including tuition & fees, room & board, books & supplies, transportation, and any other expenses.

  • Private 4-Year Not-for-Profit: $50,900   
  • Public 4-Year Out-of-State: $40,940  
  • Public 4-Year In-State: $25,290  
  • Public 2-Year In-District:​ $17,580   
  • Private For-Profit: $16,000 (tuition only)
Source: Lend EDU
Source: Lend EDU

 

Mortgage Rate Competition Index Widens (Lending Tree) Rated: AAA

  • Homebuyers could have seen median savings of $27,980 by comparison shopping for the best mortgage rates last week, up 4.5% from the prior week.
  • This week’s Mortgage Rate Competition Index was 0.60 for purchase mortgages, up 0.15 from a year ago, and up 0.02 from last week. The Index measures the median spread between the highest and lowest APR available on the LendingTree platform.

Purchase loans

  • Across all purchase loan applications on LendingTree for the week ending March 18, 2018, the index was 0.60, up 0.02 from the previous week.
  • How big of a deal is it to nab a mortgage rate that’s 0.60% lower than the competition? Over 30 years, that could translate to $27,980 in savings on a $300,000 loan
Source: Lending Tree

Mortgage fintech company completes capital raise (National Mortage News), Rated: B

Home Captain, a fintech company that looks to increase mortgage-lead conversion rates, completed a Series A financing round led by Spring Mountain Capital.

Spring Mountain joined Second Century Ventures, the strategic investment arm of the National Association of Realtors, as an institutional investor in Home Captain, which pairs prequalified homebuyers with real estate agents.

Ken Rees, CEO of Elevate, to Speak at LendIt Fintech Conference (Business Wire), Rated: A

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, announced today that their Chief Executive Officer, Ken Rees, will address the audience at LendIt Fintech 2018 along with CNBC’s Ari Levy.

Rees will be joined by Levy, senior technology reporter at CNBC, who will lead the discussion through a variety of themes, including:

  • How banks and fintech companies can partner to take advantage of the opportunity in non-prime lending
  • What it takes to build winning products for non-prime consumers
  • Predictions for the biggest areas of innovation in non-prime lending in 2018 and beyond

Covr Financial Technologies announces Michael Kalen as Chief Executive Officer (PR Newswire), Rated: B

Michael Kalen has joined Covr Financial Technologies, a digital, multi-carrier life insurance platform for financial institutions, as its chief executive officer, Covr Board Chairman Brian Finn announced.

U.S. Online Merchants Believe Instant Financing Will Drive Increased Sales (PNY), Rated: A

Online merchants in the U.S. are increasingly recognizing the importance of offering instant financing to shoppers, according to a new online e-commerce survey. Nearly two-thirds of retailers polled (64 percent) believe providing online financing options through their store is important to driving new and increased sales. Forty-six percent indicate it would decrease cart abandonment still one of the most critical challenges for online retailers today.

The survey was released here by Klarna, a leading global payments provider, at Shoptalk in Las Vegas.

Franklin Resources to Acquihire Random Forest Capital (Street Insider), Rated: B

Franklin Resources, Inc. (NYSE: BEN), which operates as Franklin Templeton Investments, today announced the acquisition of Random Forest Capital, LLC (“Random Forest”), an investment firm with expertise in data science and non-bank marketplace lending. Following the acquisition, the Random Forest team will join the Franklin Templeton Fixed Income Group investment team. Terms of the transaction were not disclosed.

New Florida law will loosen small-dollar lending rules (American Banker), Rated: B

Florida Gov. Rick Scott signed a bill Monday that will loosen the state’s rules for small-dollar consumer lending.

The law, which sailed through both houses of the Florida Legislature, authorizes 60- to 90-day loans of up to $1,000, while continuing to allow 30-day payday loans.

United Kingdom

Monzo Milestone: Challenger Bank Hits Half A Million Current Accounts (Crowdfund Insider), Rated: AAA

On Monday, UK-based challenger bank Monzo announced it has achieved half a million current accounts. The company launched its current accounts in October last year and since then, thousands of users have upgraded their accounts or signed up to start using Monzo’s banking products.

Monzo also reported that it will close the prepaid Beta on April 4th, so if users have not upgraded, their card will stop working and they won’t be able to use your Monzo app to make or receive payments.

Welendus goes live with interest-free loan offer (Peer2Peer Finance), Rated: A

PEER-TO-PEER payday lender Welendus has launched its first product, offering borrowers an interest-free loan if the debt is repaid in one day.

Individuals can borrow up to £500 using the new facility, which is aimed at those faced with unexpected or emergency bills, Welendus said. The borrower does not have to pay any interest if they pay the loan back within 24 hours.

There are no early repayment fees and borrowers can get a decision within five minutes.

Investors will receive returns ranging between five and 15 per cent to fund the loans.

Fintech referral platform bags series A fundraise (AltFiNews), Rated: A

Funding Xchange, one of a handful of platforms designated by HM Treasury to refer businesses declined credit by the banks to other sources of funding, has closed a £1.5m series A round.

The round was led by Calibrate Management Ltd and Kimera. The money will be used to continue the development of Funding Xchange’s automated decisioning technology, as well as for the incorporation of live transactional data sources.

Inflation finally falls but still beats savings returns (Peer2Peer Finance), Rated: A

INFLATION hit a seven-month low last month but there is little sign of respite for interest-starved savers as ISA season approaches, figures show.

Official for National Statistics (ONS) data shows consumer price inflation (CPI) grew by 2.7 per cent in February, finally falling from its five-year high of three per cent but still above the Bank of England’s two per cent target.

 

“But still, with inflation sitting at 2.7 per cent, savers’ cash is being eroded in real terms. In comparison to last year, savers would have found it difficult to get one per cent on an easy access ISA.”

Senior RBS fintech investment banker re-emerges at startup (Financial News), Rated: B

A former Royal Bank of Scotland investment banker, who led its coverage of fintech deals, has quit his private equity job after just five months to join a peer-to-peer lending startup staffed by former Goldman Sachs and HSBC analysts.

Rory McHugh, a former managing director at RBS, has joined Lendable, a UK-focused personal loans platform. Set up in 2014, the firm offers loans of up to £20,000 and raised £300m to lend to new customers in November.

Be a venture capitalist with an Innovative Finance Isa (The Times), Rated: A

Compared with cash Isas, Ifisas are as much a high-risk option as any loan that is not protected by the Financial Services Compensation Scheme (FSCS). This means that lenders cannot seek money from P2P borrowers that are unwilling or unable to pay money owed, whereas the scheme protects savings and investments offered by FSCS-authorised banks and other companies.

Source: The Times

There are more than 30 providers jostling for space and support from subscribers, with typical rates of return of between 3 and 7 per cent, as well as some offering up to 16 per cent. The interest rates on offer comfortably outstrip the 2 to 3 per cent attached to cash Isas. See our table, below, for a range of Ifisas presently available to new customers.

FCA calls for global effort to speed up fintech growth (NAI500), Rated: B

The Financial Conduct Authority has called for the creation of a global alliance of regulators that would encourage growth in fintech by allowing companies to test new products without going through a full approval process.

Speaking at the Innovate Finance Global Summit in London, Mr Woolard said expanding such a programme internationally would be “an immense undertaking”, but said “we’re up for the challenge”, having already seen “lots of interest” from other regulators.

China

Hot Chinese IPO LexinFintech Falls Short On Q4 Earnings, Revenue (Investors Business Daily), Rated: AAA

LexinFintech (LX) reported weaker-than-expected fourth-quarter earnings and revenue as the Chinese online lender issued its first quarterly report since its December IPO.

LexinFintech earned 4 cents per U.S. share diluted on revenue of $244.95 million. Analysts had expected EPS of 13 cents on revenue of $279.7 million, according to Yahoo Finance.

Shares tumbled 12.4% to close at 15.98 on the stock market today after rallying 5.3% on Monday to 18.25.

Loan originations rose 115% vs. a year, customer balances swelled 95% and registered users 99%. Acquisition costs per customer fell 22%.

Dow Jones Leads Morning Rally, But This FANG Stock Falls Further (Investors Business Daily), Rated: A

IPO Leader LexinFintech (LX) fell over 8% after the Chinese online lender reported weaker-than-expected Q4 earnings and sales results. The new issue has been volatile after a short-lived breakout above an 18.39 IPO-base entry on March 9. Just days later, the stock would trigger the 7%-8% sell signal before rebounding.

Golden Bull Limited Announces Pricing of Initial Public Offering (PR Newswire), Rated: A

Golden Bull Limited (“Golden Bull” or the “Company”) (NASDAQ: DNJR), an online finance marketplace that connects individual lenders with individual and small business borrowers, today announced the pricing of its initial public offering of 1,550,000 ordinary shares at a public offering price of $4.00 per share, for total gross proceeds of approximately $6.2 million before underwriting discounts and commissions and offering expenses. In addition, Golden Bull has granted the underwriters a 45-day option to purchase up to an additional 232,500 common shares at the public offering price, less underwriting discount and commissions.

 

European Union

The challenger bank N26 raises $ 160M ahead of U.S. launch (American Banker), Rated: AAA

The mobile-first bank N26 in Berlin has raised $160 million in preparation for its launch of a challenger bank in the United States.

All told, N26 has raised $215 million. Previous investors have included Peter Thiel’s Valar Ventures, Earlybird Venture Capital and Li Ka-Shing’s Horizons Ventures.

Part of the $160 million will be used on product development for the existing offering in Europe, according to U.S. CEO Nicolas Kopp. The rest — and he would not say how much this is — will be used for international expansion, most immediately into the U.K. and U.S. markets.

Swedish banks risk losing tens of billions of euros to fintech startups – here are the ones leading the charge (Business Insider), Rated: A

On Monday, the startup Enkla launched, causing a stir in the market. Their interest rate of 0,95 percent is well below the banks’ average interest rates and according to their CEO, Alexander Widegren, Enkla received about 2 billion euros (SEK 20 billion) in applications their first day, Di Digital reported.

Enklas goal is set to lend out 10 billion euros within 18 months.

The four largest Swedish banks, SEB, Nordea, Handelsbanken and Swedbank – which have a combined 75 percent share of the country’s mortgage market – all had a rough day on the stock market on Monday, which may have been caused in part by the emerging threat.

Australia

Australian SMEs favor alternate lending to fund business (Enterprise Innovation), Rated: AAA

Australian small and medium size enterprises (SMEs) are turning to non-banks to secure funding for their business. The latest issue of the Scottish Pacific SME Growth Index revealed that, between 2014 and 2018, the proportion of SMEs intending to use banks for funding has dropped from 38% to 24%. It also found that non-bank funding is now the first option for 22% of SMEs, up from 11% in 2014.

Moreover the report noted that 47.6% of SMEs, who have not used any non-banking lending options in the last 12 months, would be interested in using these options in the future.

There is an estimate 2.1 million SME businesses in Australia employing more than 7.3 million people or about 68% of Australia’s overall workforce.

Source: Enterprise Innovation

FinTechs To Surpass Banks As Aussie SMBs’ Top Finance Choice (PYMNTS), Rated: A

The “Scottish Pacific SME Growth Index,” released twice a year, found the portion of small businesses that said they would use banks for funding declined from 38 percent in 2014 to 24 percent in 2018.

Nearly half (47.6 percent) of SMBs that said they never used a non-bank to access financing said they would be interested in doing so in the future.

Asia

PT INVESTREE Radhika Jaya (Investree), a pioneer peer-to-peer lending (P2P) marketplace in Indonesia, is eyeing to close its Series B funding by the first half quarter of this year.

The company received an undisclosed amount of funding from Kejora Ventures in June 2016.

Investree has facilitated 600 billion rupiah (US$45 million) in loans to 330 SMEs, with 16,000 registered lenders, 5,000 active lenders between 21 to 40 years of age and has a return rate of 16.6% with no defaults.

In terms of business growth, Investree has seen 14% to 15% growth in revenue since 2016.

 

Latin America

Alipay breaks ground in Mexico (Finextra), Rated: AAA

Alipay, the world’s leading digital payments platform, operated by Ant Financial Services Group, today announced that it is further expanding its footprint in the Americas through a partnership with Openpay in Mexico.

Now, Alipay’s more than 600 million active users in China will be able to use Alipay to make purchases from Openpay’s affiliated businesses in Mexico. Alipay is China’s leading payment provider and the primary means of online and mobile payment for Chinese consumers.

Authors:

George Popescu
Allen Taylor

Thursday December 14 2017, Daily News Digest

online lender delinquency rates

News Comments Today’s main news: LexinFintech relaxes on IPO funding goal. Welendus exceeds Seedrs funding target. LendingTree provides 2018 guidance prior to Investor Day. Yirendai invests in Lion Rock. Mercer delivers financial advice with AI through Facebook Messenger. Today’s main analysis: Online lenders test the faith of investors. Today’s thought-provoking articles: Why Google, Amazon scare BlackRock, Fidelity. A new chapter […]

online lender delinquency rates

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Asia

South America

News Summary

United States

Why Google and Amazon Keep Fidelity and BlackRock Up at Night (Bloomberg), Rated: AAA

“Alexa…will I meet my retirement goal?”

“You are not on track to meet your retirement goal,” replies Amazon.com Inc.’s voice-activated digital assistant, with not a bit of sugar-coating. Then she suggests turning over $76 a month to Fidelity Investments and its advisers.

This won’t actually happen if you try it on your Amazon Alexa device at home. It’s a demonstration put on by EMoney Advisor LLC, a company owned by Fidelity, in its offices in Radnor, Pa. Amazon provides software for third-party developers to experiment with new functions. Fidelity is trying to find ways to apply artificial intelligence, computer algorithms, and voice-­recognition software to the hidebound world of money management and investing.

Earlier this year, Boston-based Acadian Asset Management LLC struck a deal so its portfolio managers could use Microsoft Corp.’s Bing Predicts, which makes forecasts using search and social media data, to help pick stocks; that agreement later ended.

BlackRock, led by chief executive officer Larry Fink, in recent years has been buying stakes in other companies, particularly technology firms. Through these purchases, the company is pushing into new lines of business.

Fidelity bought EMoney in 2015. It sells software to investment advisers that’s designed to make it easier to interact with their customers on budgeting for weddings, college, or retirement.

Online lending platforms test investors’ faith (Financial Times), Rated: AAA

Tianqiao Chen still wants to be part of Lending Club. Last week, while shares in America’s biggest listed online lender were tumbling after another cut to profit forecasts, the chief executive of Shanda Group bought 4m more of them, further cementing his position as the company’s biggest shareholder.

Many operators are feeling the effects of a big push for market share in the latter half of 2015 and early months of 2016, says David Snitkof, chief analytics officer at Orchard. As the platforms rushed to offer new loans, credit quality suffered, and loans originated during that period are among the worst performers, with loss rates well ahead of projections.

Across the sector, valuations have fallen. Earnest, a San Francisco-based student loans specialist, sold itself in October to Navient, the loan-servicing company, for $155m, or about 40 per cent of its peak valuation. Personal lender Prosper, once a “unicorn”, saw its pricetag drop from a peak $1.9bn to $550m in a fundraising last month.

That meant platforms had to spend heavily to bring compliance and controls systems up to scratch. Lending Club’s latest quarterly filing, for example, shows it had $1.21 of operating expenses for every dollar of fee income over the first nine months — up from $1.03 at the same point two years ago.

LendingTree Introduces 2018 Guidance Ahead Of Investor Day (Business Insider), Rated: AAA

Business Outlook – 2018

  • Revenue is anticipated to be in the range of $770 – $790 million, representing growth of 27% – 30% over the high-end of full-year 2017 guidance of $608 million.
  • Variable Marketing Margin is anticipated to be $270 – $280 million.
  • Adjusted EBITDA is anticipated to be in the range of $145 – $150 million, up 28% – 33% over the high-end of full-year 2017 guidance of $113 million.

The Analyst and Investor event is being hosted in New York at the Nasdaq MarketSite in Times Square.  The presentation will begin promptly at 10:30 a.m. ET.  A live audiocast with accompanying slides will be made available on the company’s investor relations website at investors.lendingtree.com.

 

Does the ICO Open a New Chapter for RE Crowdfunding? (Lexology), Rated: AAA

An ICO is simply the initial public sale of a new type of digital “coins”, or “cryptocurrency”.

Judging from the prolific way these new cryptocurrency ICOs are popping up, like mushrooms after a spring rain, one might imagine any clever techie could spin one up at the kitchen table with little more than an internet connection and some well-caffeinated daring-do. Yes, ICOs are easier than crowdfunding, they have that special “blockchain” cachet going for them, and the “regulators talons” have not yet sunk deep.

In a real-life example, on September 29, 2017, the SEC filed a civil complaint in federal district court against ICO promoter Maksim Zaslavskiy and two companies run by Mr. Zaslavskiy. According to the complaint, between July and October Mr. Zaslavskiy and his companies raised at least $300,000 in an ICO touting a new cryptocurrency called “REcoin” — “the first ever cryptocurrency backed by real estate.” According to the SEC complaint, Mr. Zaslavskiy and his companies have been peddling unregistered securities. Furthermore, the complaint alleges, the companies never had any real operations even though Mr. Zaslavskiy told investors in REcoin they could expect sizeable returns from those company’s operations; the securities he sold weren’t backed by any real estate or other assets as he claimed they were; and no “REcoin” digital tokens ever actually existed.

ICOs and Crowdfunding

Circling back to the original crowdfunding thesis, we should also expect this disruptive new technology to begin surfacing in even more impactful nextgen “killer apps” for commercial real estate investment. That’s right, real estate crowdfunding may actually make a comeback by dint of being co-opted into the blockspace. New-age real estate crowdfunding ecosystems are already forming; for instance, the Real Estate Asset Ledger (“REAL”) is one application currently being talked up as a real estate crowdfunding network built on blockchain infrastructure.

The Rise of the ICO (Coinlist), Rated: AAA

Zeus CrowdFunding Earns Top-Ten Ranking in Real Estate Crowdfunding Industry (PR.com), Rated: B

Zeus CrowdFunding earned high marks recently from an independent ranking and reviews portal. The Real-Estate Crowdfunding Review named Zeus CrowdFunding the #7 real estate crowdfunding site on the Web based on its “incredible volume” and other impressive advantages.

The ranking also lauded Zeus CrowdFunding’s low default rate and semi-liquidity option and guarantee and called the company “one of the few platforms offering conservative loans below 65% LTV.”

To read The Real-Estate Crowdfunding Review’s ranking and review of Zeus CrowdFunding, visit

Open Banking Trends Shift to US Market (Lend Academy), Rated: A

Open Banking is set to launch in Europe next month. As banks and fintech firms rush to ensure compliance we wanted to explore the effects on the US fintech market. Recently the CFPB set forth data sharing guidelines for banks and fintech firms to share information. There has since been a number of articles in the news pointing to frustration among fintech companies as banks have not been forthcoming with data sharing.

The current process is clumsy and requires consumers to login many times across many different services. This has also been something banks have complained about to agencies like the CFPB. Services such as Personal Capital and Mint constantly ping bank accounts for information that users have open access to. Setting up a similar initiative in the US could not only allow for a better experience but will undoubtedly be safer for the banks and fintech firms.

LendingUSA Secures $ 60m Credit Facility (Finsmes), Rated: A

LendingUSA, a Sherman Oaks, CA-based point-of-need financing company, secured a $60m credit facility.

The funding was provided by CapitalSource, a division of Pacific Western Bank, and a provider of commercial lending and banking solutions.

 

U.S. Fintech Simility Secures $ 17.5 Million During Latest Funding Round Led By Accel With Participation From PayPal (Crowdfund Insider), Rated: A

Simility, a provider of machine learning–powered adaptive fraud prevention solution, today announced it has secured $17.5 million during its latest funding round. PayPal, Inc. also participated in the round as a new strategic investor along with existing investors The Valley Fund and Trinity Ventures.

First National Bank Plans Online SMB Lending Portal (PYMNTS), Rated: A

First National Bank and Trust Company is planning the launch of a digital small business lending portal and has tapped a partner to create the solution.

The financial institution (FI) said Tuesday (Dec. 12) that it is working with FinTech firm RCGILTNER Services to deploy the digital platform, which will launch in the first quarter of 2018.

Aspiration Taps $ 47 Million for Conscientious Banking (WSJ), Rated: A

Conscientious consumption and online banking services don’t typically go hand in hand. Andrei Cherny, co-founder and chief executive of Aspiration, aims to change that.

Aspiration, which offers online banking with optional fees and no penalties, provides its customers insights on how companies treat the environment and their employees, informing spending decisions.

Aspiration now boasts more than 200,000 account holders since launching in February 2015. On Tuesday, the Los Angeles company said it raised a $47 million Series B to further fuel its ambitions.

Will 2018 Be the Year of the Bank of Amazon? Experts Weigh In (Fortune), Rated: A

Payments

Matt Harris, Bain Capital Ventures: “SoftBank buys 20 percent of Stripe for $3 billion. PayPal continues to push itself down the path of being the leading financial services company for millennials and the mass market.” Dion Lisle, Capgemini SA: “‘Alexa, buy this’ or ‘Siri, I need an Uber, pay for it with my AmEx.’ Payments are going to be activated by that voice because that’s a great security method.”

Lending

Spencer Lazar, General Catalyst Partners: “Potential changes to the Consumer Financial Protection Bureau (CFPB) under the Trump Administration will likely turn back the clock on Obama-era regulations on non-bank lenders. This will be a boon to startup lenders, making it far easier to dole out capital. The fear is that rates could potentially become predatory.”

Amazon vs. JPMorgan

Andy Weissman, Union Square Ventures: “Some combination of Amazon, Google, Facebook, Apple, etc. will move deeper into online financing of small businesses.”

M&A

Tyler Sosin, Menlo Ventures: “Stripe and Adyen will merge, forming a $20 billion plus enterprise-value business and API-driven merchant processor.”

Funding

Charles Birnbaum, Bessemer Venture Partners: “Valuations in the alternative-lending space were overly optimistic in our opinion over the prior five years, but we do feel that the pendulum has likely swung back too far in the other direction following the recent pullback” leaving the sector ripe for potential funding or M&A.

Braviant Holdings Announces Launch of Chorus Credit Personal Loans (PR Newswire), Rated: A

Braviant Holdings, a leading fintech startup that offers analytics and technology-driven credit solutions for underserved Americans, is now offering personal loans up to $10,000 in Californiathrough its Chorus Credit online lending platform. Chorus will complement Braviant’s existing installment lending business, Balance Credit, by offering higher loan amounts at lower rates to the estimated 26% of California consumers who are underserved by traditional banks.

2017 YEAR-IN-REVIEW (Wunder Capital), Rated: A

In 2017, we increased our solar project pipeline by an order of magnitude. This is due in large part to more resources dedicated to pipeline development, advancements in our lending practice, and – at a macro level – a rapidly growing solar market and commercial sector.

Source: Wunder Capital

See the full report here.

Not “ripe,” says judge dismissing N.Y. fintech charter challenge (Banking Exchange), Rated: A

Yesterday U.S. District Judge Naomi Reice Buchwald of the Southern District of New York dismissed one of those lawsuits, Vullo v. Office of the Comptroller of the Currency. The judge dismissed the suit of the New York State Department of Financial Services, headed by Maria Vullo, against OCC on the grounds that the matter is not “ripe” for a decision on the legal ability of the Comptroller’s Office to issue such specialized charters.

Indeed, at the recent RegTech Enable conference in late November, OCC’s Beth Knickerbocker, chief innovation officer, characterized the proposal as “on hold.”

Why New York’s claim isn’t ripe

Judge Buchwald’s decision recapped the history of the proposal at length. Her decision came down to this sentence: “Claims are not ripe if they depend on the occurrence of contingent future event that may never occur at all.”

She pointed out that no injury would occur if OCC never issues such a charter to a fintech company.

Vanguard, the fund giant with nearly $ 5 trillion in assets, is using blockchain to underpin its mutual funds (Business Insider), Rated: A

Vanguard is moving to use blockchain to simplify how it updates index data underlying mutual funds, executives said on Monday, an important sign of confidence for the new financial technology.

Closely-held Vanguard, the top mutual fund firm with nearly $5 trillion under management, has successfully tested blockchain to automatically update data like the names and share prices of companies in index funds, processes that must currently be closely overseen by individuals, said Warren Pennington, a principal in Vanguard’s investment management group, in Pennsylvania.

UNOPPOSED MOTION FOR LEAVE TO FILE AMICIUS CURIAE BRIEF (U.S. District Court, D.C.), Rated: A

Further, to date, the parties have not raised an important argument that this Court should consider, namely, that restricting the President’s authority over the CFPB Director’s replacement only exacerbates the serious constitutional questions currently before the D.C. Circuit with respect to the CFPB’s structure. As CUNA explains, such questions could be avoided by adopting Defendants’ position in this case. Thus, CUNA’s perspective on the central issues in this case is invaluable and unrepresented by the parties.

Read the motion in full here.

(Coindesk), Rated: A

The startup revealed today that, through an existing partnership with MicroVentures, it will begin offering services to projects seek to use the blockchain funding model.

Specifically, accredited investors purchase Simple Agreements for Future Tokens (SAFTs), with the tokens set to be delivered at a later date. The mode has been used by a number of ICOs in recent months, and according to the page on MicroVentures, $915,000 has been raised from nine investors thus far in the new ICO.

Mastercard targets millennial clients with digital money management service (American Banker), Rated: B

The payments company today announced it is launching a new service called Assemble, which it calls a “prepaid innovation hub” designed to allow Mastercard partners or issuers to provide checking, budgeting, and payment features, as well as additional money management tools.

Longfin Corp. Becomes the First Public-listed FinTech Company Under Reg A+ on Nasdaq (GlobeNewswire), Rated: B

Longfin Corp. (NASDAQ: LFIN) announces that it will be traded on the Nasdaq market for the first day after its initial public offering (IPO) under Reg A+ closing on December 8, 2017.

U.S. News & World Report Names LendingPoint One of 2017’s Best Personal Loan Companies (BusinessWire), Rated: B

LendingPoint was named one of nation’s six best personal loan companies by U.S. News & World Report.

The media company evaluated personal loan companies in five key areas, reviewing data on eligibility, loan terms, fees, repayment methods and additional features. LendingPoint was cited as 2017’s top lender for people with fair to good credit, who have merit-based qualifications beyond FICO scores that make them worthy loan candidates.

Quesnay’s Female Founders in Tech Program Awards Goalsetter First Place (PR Newswire), Rated: B

Quesnay is pleased to announce that Goalsetter is the winner of the inaugural Female Founders in Tech, spotlighting female founders that positively impact the financial services and/or insurance technology industries.

The winners represented cutting-edge businesses that were also socially conscious:
– Goalsetter – Goalsetter is a goal-based savings and gifting platform, targeting millennials.
– Marinus Analytics – Marinus uses technologies to help identify and fight crimes like human trafficking and money laundering associated with it and other illicit activities
– LENDonate – LENDonate provides a marketplace lending platform for non-profits and supporters.

Approximately 100 women-led startups registered for the program with solutions ranging from artificial intelligence to blockchain to creative financial literacy and savings solutions. Seven finalists presented in New York to a panel of judges which included industry leaders from the sponsoring organizations: John HancockMassMutualRGAxSterling National BankTD Bank and Thomson Reuters.

 

United Kingdom

Welendus exceeds Seedrs fundraising target (P2P Finance News), Rated: AAA

WELENDUS, the peer-to-peer payday loan provider, has announced that its latest crowdfunding round on Seedrs has reached over 130 per cent of its target.

The firm had been seeking £150,000 but has already raised £197,991, according to Seedrs’ website.

Welendus said on Thursday that the funding round had attracted more than 250 investors.

Investec Provides U.K. Fintech With $ 67 Million for Online Loans (Bloomberg), Rated: A

London-based MarketInvoice, which arranges loans for small companies secured by accounts receivable, will handle the underwriting for Investec customers in the partnership, according to the bank’s website. Investec will provide 50 million pounds ($67 million) in the first year to fund the loans, Anil Stocker, the startup’s co-founder and chief executive officer, said in an interview.

The rise of the payday-style business loan (City A.M.),  Rated: A

British banks have been mired in criticism for not lending as much as they could.

Many businesses have meanwhile found that alternative lenders lack the data to provide products that are tailored to their needs.

Creative credit

Rate hikes typically result in an increase in lending profitability, and so the increase often stimulates the appetite to lend.

But an increased appetite to lend doesn’t always follow an increased ability to price risks on all loan applicants, and herein lays the risk: lenders become creative with the ways in which they entice borrowers and mitigate their risks.

These loans from mainstream lenders look like the payday loans that flooded the market in the height of the recession. They take minutes to apply for, turnaround is within one day, and command interest rates of up to 23 per cent APR – five times more than some personal loans.

Data shows increase in demand for alternative finance services (Londons School of Business Finance), Rated: A

The figures showed growth across the UK’s alternative finance market, including crowdfunding, invoice trading, and marketplace lending. The date found a year-on-year rise of 43 per cent in 2016 from £3.2 billion to £4.58 billion.

Business marketplace lending grew by 28.5 per cent from £881 million in 2015 to £1,232 million in 2016, placing it ahead of consumer marketplace lending, which previously had the biggest share.

LendInvest’s Latest Buy-to-Let Index Reveals: Manchester Tops Charts & Hull is Named Biggest Climber (Crowdfund Insider), Rated: A

On Wednesday, specialist property lender LendInvest released its latest LendInvest Buy-to-Let Index report, which ranks all 105 postcode areas around England and Wales based ona combination of four metrics, which are capital gains, transaction volumes, rental yields, and rental price growth.

The Index report’s key findings include:

  • Manchester, leader of the Northern Powerhouse, takes top spot
  • Leicester breaks into the Top 10 and Birmingham climbs 8 places from #18 to #11, signaling upward mobility in the Midlands markets
  • Hull marks itself as biggest climber for 2017, rising 93 places to #6
  • Enfield tumbles from Top 10 in February to Bottom 10 in December
Source: LendInvest

Download the full report here.

One in two advisers ‘fire’ clients with less than £50,000 (Money Observer), Rated: A

Those with pot sizes of less than £50,000 are increasingly being turned away by their financial adviser. In 2014 just under a quarter of clients were shown the door, whereas in 2017 this figure rose to 50 per cent.

Artificial intelligence is guiding venture capital to start-ups (Financial Times), Rated: A

Mr Bonanzinga thought he could combine internet data and machine learning to do a better job of ferreting out prospects. It took two years and £5m in investment for InReach Ventures to create the software, which has so far trawled through 95,000 European start-ups, picking out 2,000 that Mr Bonanzinga might be interested in.

The software determines this based on the people they are hiring, the products they are developing and the traffic on their website, among other things.

Tifosy: The sports crowdfunding platform that wants to help small teams grow and big teams reconnect with fans (City A.M.), Rated: B

The company has already partnered with 15 clubs in England and Italy, raising £2.9m from “fanfunders” for a variety of different projects.

So rather than owners selling equity stakes to unfamiliar outside investors, crowdfunding solutions such as mini-bonds or equity shares have emerged as alternative solutions to many sports franchises.

Top-flight rugby clubs Harlequins and Wasps raised £15m and £35m respectively by issuing their own bonds, while Surrey County Cricket club raised £5m in seven days in 2015.

China

Chinese Online Lender LexinFintech Shrinks U.S. IPO Fundraising Goal (WSJ), Rated: AAA

LexinFintech Holdings Ltd., a Chinese online lender that is planning to go public in the U.S., scaled back its fundraising ambitions after regulatory changes in China sparked a rout in shares of similar companies.

Lexin, a four-year-old company whose backers include Chinese online-retail giant JD.com Inc., is planning to raise $120 million in an initial public offering, according to a Wednesday filing with the Securities and Exchange Commission.

JD.com-backed micro lender slashes IPO by 70pc after China’s internet finance crackdown (SCMP), Rated: A

Lexin Fintech plans to offer 12 million American depositary shares at an indicative price range of US$9 to US$11 a share, raising as much as US$132 million, the company said in an updated filing on Thursday to the US Securities and Exchange Commission.

The fundraising value is sharply down from an originally planned US$500 million, as mentioned in the IPO prospectus issued last month.

Noncompliant P2P Lenders to Be Out by Mid-2018 (Caixin), Rated: AAA

Local banking regulators have until the end of June to weed out noncompliant peer-to-peer (P2P) lenders, according to a circular issued by a special working group led by the China Banking Regulatory Commission (CBRC).

Yirendai Announces Strategic Investment in Lion Rock (Business Insider), Rated: AAA

Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”), a leading fintech company in China, announced today that it has made a strategic investment in Lion Rock, a comprehensive financial services platform that is focused on global asset allocation, through Lion Rock’s Series A financing of HK$50 million.

Lion Rock is headquartered in Hong Kong and offers a wide-variety of high-quality financial products, financial news, robo-advisory services as well as asset allocation services through its online platform.

Hong Kong Fintech Start-Up Lion Rock Raises $ 6.4M Led By Marathon Venture (China Money Network), Rated: A

Lion Rock FinTech Ltd., a Hong Kong-based fintech company, has raised HK$50 million (US$6.4 million) in an equity financing led by Marathon Venture Partners.

In addition, 9F Inc., the strategic investor who backed Lion Rock’s last round of financing, continued to invest in this round.

European Union

The Culture of p2p Investors Across the EU (FastInvest), Rated: AAA

FastInvest, a p2p fintech platform, recently studied data from over 8500 EU investors daily and came across a really unexpected finding. Highly specific traits and behaviors were driven by nationality over and above other individual factors when looking at big data.

From traditional investment metrics like risk aversion, to outside the box items like nationalistic tendencies and compulsive behaviors.  Across numerous areas, national cultural traits could be seen solely based on country to country locales.

Source: FastInvest

Poland
Even with the EU offering a bit of a more stable currency, only 1.76% of residents prefer to invest in Euro based currency loans.

Belgium
Only 2.20% of Belgian investors choose PLN (Polish) currency based loans as opposed to their own Euro.

Germany
Germans appear to be the most open minded of EU countries, with 15.73% making investments in PLN currency.

Netherlands
The Netherlands followed behind Germany in diverting from the euro, with 9.08% of investors choosing PLN based loans.

Download the full report here.

iZettle Grabs $ 47M Additional Funding, Eyes Market Expansion (PYMNTS), Rated: A

iZettle has grabbed €40 million in funding (the equivalent of $47 million) that the Stockholm-based payments firm will use to expand into new markets.

International

Disruptive Startup, Etherecash, Concludes ICO Ahead Of Schedule (Coinidol), Rated: B

Etherecash is one step closer to actualizing its vision of bridging the financial divide between the banked and the unbanked with the successful conclusion of its ICO ahead of schedule. The ICO is now scheduled to finish on 12th Dec 6:29 PM (GMT) after four impressive bonus rounds that outperformed expectations.

With over $30 million raised and 45000 registered participants, Etherecashcan now set its sight on eliminating traditional borders, intermediaries and prejudices in the way money is lent, spent, and sent.

Australia/New Zealand

MERCER LAUNCHES SUPERBOT, ARTIFICIAL INTELLIGENCE DELIVERING FINANCIAL ADVICE VIA FACEBOOK MESSENGER (Mercer), Rated: AAA

Australia’s 17 million active Facebook users spend on average 1.4 hours a day liking, commenting and sharing stories with family and friends. Moreover, with roughly 17% of the earth’s population being active users of Facebook Messenger, there is irony in the fact that the smartphone generation is spending more time engaging on Facebook rather than thinking about their future financial readiness.

Accessed through Facebook Messenger, SuperBot represents the ultimate opportunity to scale financial advice across a very large proportion of the population.

Non-bank lenders lift profit 10% in 2017 (NBR), Rated: A

Eighteen of the 25 participants in the KPMG non-bank financial institutions performance survey posted increased earnings in 2017, generating a total net profit of $216.7 million, up from $196.6 million a year earlier. Total assets grew 12 percent to $10.96 billion, with lending boosted by the nation’s strong demand for new vehicles and several non-bank institutions testing the waters in the mortgage space as the major banks become more reticent in some of their credit criteria.

HNWI financial advice demand falls (Financial Standard), Rated: A

The use of financial advice among high-net-worth investors (HNWI) has fallen to a five-year low, according to the insights, which show 435,000 millionaires own more than $1 million of investable assets.

Almost 75% of HNWIs relied on the expertise of a financial advice professional in 2013 – but this has declined to 68% in 2017.

Credit Suisse found the number of Australian millionaires rose by 200,000 in the year to June, marking the third-largest increase after the US and Germany in its global wealth ranking.

CCR to help business financing (InvestorDaily), Rated: B

Indeed, interest rates on small business loans have “remained relatively high” due to a lack of competition – leaving banks as the major provider of lending to small businesses (80 per cent).

But a CCR regime would offer lenders more information about potential borrowers’ credit history than just negative credit information, as per the current standard.

The Australian government has determined a mandatory credit reporting regime to come into effect in July 2018, but a number of financial institutions such as NAB have already announced it will roll out such a regime.

Other forms of accessing finance for smaller firms or entrepreneur were large technology firms and alternative financing platforms, such as marketplace lending and crowdfunding, he added.

India

Online loans marketplace FinBucket gets funding from Impanix Capital (VC Circle), Rated: A

FinBucket Pvt. Ltd, which runs an eponymous online marketplace for loans and investments, has raised Rs 12 crore ($1.8 million) from Delhi-based early-stage venture capital firm Impanix Capital.

The startup plans to use the funds to increase its staff strength to 200 and expand operations.

‘Fintech can help assess credit score ’ (The Hindu), Rated: A

Financial technology firms that generate credit scores based on digital footprints of individuals will have a major role to play as banks begin to focus on lending to first generation customers who do not have credit history, former Deputy Governor of Reserve Bank of India H.R. Khan said here on Wednesday.

Fintech startup CapitaWorld raises funding (VC Circle), Rated: B

Mumbai-based fintech startup CapitaWorld Platform Pvt. Ltd has raised an undisclosed amount through convertible equity from high-net-worth individuals, corporate honchos and investors from Hong Kong and the Middle East.

The investors who participated in the latest round include former chief executive of Indian Banks’ Association Mohan Tanksale, Swift India CEO Kiran Shetty, Madhu Silica’s managing director Darshak Shah and former JP Morgan executive Mandar Mhatre, the startup said in a statement.

Asia

BHSI Launches Financial Institution Professional Indemnity Insurance in Asia (Insurance Journal), Rated: A

Berkshire Hathaway Specialty Insurance Co. (BHSI) announced it has introduced Financial Institution Professional Indemnity (FIPI) insurance in Asia.

The new BHSI policy is designed to cover a range of claims, from allegations of failure to disclose information, to misleading financial advice and breach of contracts, the company said in a statement. The policy combines coverage for civil liability, pre-investigations, mitigation expenses, bail bond costs, court attendance, loss of documents, and more.

The policy is designed for medium to large financial institutions, including securities dealers, regional banks, insurance companies, reinsurance companies, diversified institutions, and financial technology (fintech) and corporate advisory firms.

South America

Brazilian fintech Nubank starts international tech talent hunt (ZDNet), Rated: B

Brazilian fintech Nubank has launched an engineering center in Berlin as part of a plan to boost its software engineering function internationally.

Nubank has expatriated four of its engineers to Berlin to kickstart the European operations. It has also already started to hire local experts such as Gavin Bell, a senior engineer who previously managed the core data infrastructure platform at Soundcloud.

Authors:

George Popescu
Allen Taylor

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

News Comments

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

Tuesday November 28 2017, Daily News Digest

interest rate and value of loans

News Comments Today’s main news: Consumer Financial Protection Bureau (CFPB) to sue Santander. Welendus surpasses 150K GBP fundraising target. Klarna’s profits increase. The CFPB leadership fight migrates to email. Chinese regulator looks at online lender custodian banks. ETHLend, Brickblock partner on blockchain lending. Today’s main analysis: Everything you need to know about the P2P lending market in New Zealand. Today’s […]

interest rate and value of loans

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Asia

Africa

News Summary

United States

CFPB Set To Sue Santander Over Auto Protection Product (PYMNTS), Rated: AAA

The Consumer Financial Protection Bureau (CFPB)  is gearing up to sue Spain-based Santander Bank, claiming the bank has overcharged its car loan customers.

Citing sources familiar with the CFPB’s plans, Reuters reported that the CFPB suit could happen as soon as Monday (Nov. 27). The lawsuit is focused on Santander’s guaranteed auto protection financial product that protects car buyers from a portion of the cost if there is a serious crash.

Auto lending is big business for Santander, representing $38.5 billion of the bank holding company’s $137 billion in assets.

Cards, Bank Loans And AltFin Easing SMBs’ Search For Financing (PYMNTS), Rated: AAA

New reports from Biz2Credit, Reliant Funding and Mercator take a look at how small businesses are accessing external financing towards the end of the year as the holiday rush descends.

25 percent of SMB loan applications at large banks were approved in October, according to the latest research from Biz2Credit. That means large banks (with $10 billion-plus in assets) have boosted their SMB loan approval rates to a new post-recession high, researchers said.

56.8 percent of SMB loan applications were approved by alternative lenders, according to Biz2Credit.

12 percent of SMB owners told Reliant Funding they are aware of alternative lending and have used it. Nearly half said they are at least familiar with alternative lending. 39 percent of SMB owners told Reliant that they have never even heard of alternative lending.

42 percent of SMBs that use alternative finance say they use it to buy inventory, while more than one-fifth said they use it to replace or buy new equipment. One-fifth also said they use it for marketing initiatives, Reliant Funding found.

Workers Get Faster Access to Wages With These New Apps (WSJ), Rated: AAA

Uber Technologies Inc., McDonald’s Corp. and Bloomin’ Brands Inc.’sOutback Steakhouse are among a growing group of employers giving workers near-instant access to their wages through payday apps.

New tools that allow people to spend the money they just earned have provided some workers an alternative to short-term, high-interest loans, say the technology startups offering the services. The payment plan also can boost employee attendance and tenure, managers say.

Source: The Wall Street Journal

Daily payments could help some workers smooth out the financial volatility of fluctuating work schedules and income, economists say.

Mulvaney Shows Up For Work At Consumer Watchdog Group, As Leadership Feud Deepens (NPR), Rated: A

President Trump’s pick to lead the consumer watchdog, Mick Mulvaney, arrived at the office early Monday morning with a bag of Dunkin’ Donuts in hand. Mulvaney, the director of the Office of Management and Budget, is the acting director of the group until Trump can get a permanent leader through the Senate confirmation process — at least, according to the Trump administration.

But the former head of the CFPB, Richard Cordray, appointed Leandra English to lead the group following his departure. English has since filed a complaint in U.S. district court in Washington, D.C., to block the Trump administration’s rival appointment.

On Monday morning, English was communicating with CFPB staff through an all-staff email — a Thanksgiving message expressing gratitude and saying it was an “honor” to work with her colleagues.

Mulvaney, meanwhile, sent a competing all-staff, advising staff to “please disregard” messages from English in her “presumed capacity as Acting Director.”

Picking the best gift card this holiday season (Consumer Affairs), Rated: A

Online student loan marketplace LendEDU has ranked the best gift cards, pointing out the attributes that make one gift card a better choice than another.

According to LendEDU, roughly $1 billion in gift cards sold last year were not redeemed.

“The most important question to consider when buying a gift card is this: Is it versatile?” he told ConsumerAffairs.

Another important consideration, Brown says, is a gift card’s resale value. The recipient might rather sell the card for cash on one of the many gift card exchanges. The most popular gift cards often sell for 80 to 90 cents on the dollar, while less popular cards can go for half their face value or less.

A LendEDU poll of consumers found that 78.7 percent of consumers plan on giving at least one gift card this holiday season and 75.6 percent of consumers would rather receive a gift card than an actual gift.

Immigrant lending clubs provide capital, at a cost (Marketplace.org), Rated: A

When Chinese immigrants in Brooklyn’s Sunset Park have problems — legal, financial, marital — they come to see John Chan.

Lately, they’ve been coming to John Chan about money — specifically the collapse of informal lending clubs known as “biao hui.”

Biao hui are essentially informal banks made up of immigrants lending money to each other. A group — in China, this would traditionally be a group of close friends or relatives —gets together and throws money in the pot. One person acts as the organizer or banker and the money is then lent out on a rotating basis, with varying interest rates depending on how much money is needed, and when a person needs it.

But in New York City this year, two  biao hui worth a combined $22 million collapsed.

MERTON ON FINTECH, RETIREMENT, MORE (Top 1000 Funds), Rated: B

“Fintech will do a lot of good things, and help us, but it won’t do many of the things people are talking about, or it’s not going to do them well.”

United Kingdom

Short Term P2P Lender Welendus Surpasses £150,000 Funding Target Through Latest Seedrs Round (Crowdfund Insider), Rated: AAA

Less than a week after launching its latest equity crowdfunding campaign on Seedrs, short-term peer-to-peer lending platform Welendus has successfully secured its initial 150,000 funding target from more than 100 investors. 

One in five save less because they can’t get advice (FT Adviser), Rated: AAA

More than one in five are saving or investing less because they cannot access advice on how to handle their money, research for the Nottingham Building Society has suggested.

The study found 21 per cent of adults believe they are not saving as much as they could and would be able to put away an extra £134 a month on average if they could get financial advice – the equivalent of more than £1,600 or three weeks’ average earnings before tax.

The research showed younger savers and investors were affected most by this, with nearly one in three (30 per cent) of under-35s believing they were not saving enough because of a lack of advice compared with just 12 per cent of over-55s.

P2P Lender Lendable Signs £300 Million Loan Deal With Castle Trust (Crowdfund Insider), Rated: A

UK-based peer-to-peer lending platform Lendable has entered into £300 million loan deal with investment and mortgage firm Castle Trust.

According to AltFi, the agreement with Lendable is Castle Trust’s second major transaction in the alternative finance industry this year.

City veterans aim for ‘Google of finance’ with new digital bank (The Telegraph), Rated: A

Three senior City bankers are masterminding the launch of a new digital bank focused on shaking up the UK savings market.

The trio is led by Huy Nguyen Trieu, a fintech entrepreneur who led a capital markets team at US bank Citi in London until quitting last summer. He is working on the project with his former colleague Lionel Durix, who remains in a senior Citi role, and Paul Hanks, the former chief technology officer of UK digital bank Atom.

They plan to launch a mobile savings app that uses artificial intelligence to give savers tailored advice and offers “risk-free” products such as Isas and high interest rate savings accounts to help them reach their financial goals.

Open Banking Will Unlock the Door for Digital-Only Banks (AltFi), Rated: A

Yet in parallel to this, there is a growing cohort of digital-only banks that are bucking the trend – the most famous of which include MonzoAtom Bank and Starling Bank. Not only do they have different client service delivery models, they have cultivated a customer base that is highly supportive and engaged.

But while Monzo has acquired over 400,000 customers for its pre-paid card since 2015, as Barclays has seen over 142,000 customers switch from its current account over a similar period – digital-only banks still remain relatively unknown.

Yet Open Banking – set to launch on January 13th – stands to change this.

Addressing the housing shortage is not someone else’s problem (Mortgage Strategy), Rated: A

Last September we launched our first LendInvest Property Development Academy. A year on, it’s fair to say that the response has been overwhelming.

For too long, the housebuilding crisis has been someone else’s problem. It’s been up to the big builders to get on with, or whichever ambitious politician has been handed the housing brief this week. And let’s be honest, that strategy has been an abject failure, lacking in direction and impetus.

No, if we are going to tackle the shortage of homes across the UK, we need to recognise that it is something we can all play a part in. So if the big builders on their own are unable to build the homes the nation needs, we must do more to cultivate a generation of smaller builders, taking on more modest but no less meaningful projects. A wider source of housing developers will inevitably mean more homes are built.

London’s Startups Stress Out Over Brexit—and Ping Pong (Bloomberg), Rated: A

For all of the cheer and hip-hop thumping throughout the hall, there was an unmistakable undercurrent of anxiety this year as London’s tech community reckoned with the coming of Brexit.

“It isn’t just that we’re at risk of losing our engineering talent,” Meekings said, half-joking. “We might lose our ping-pong stars as well.”

More than 30 percent of Funding Circle’s London employees are non-British EU nationals. Ever since the company was founded in 2010, many have gravitated to the ping-pong table that co-founder Samir Desai set up in its lobby, next to a cabinet that has steadily filled up with trophies. Funding Circle is one of four companies Bloomberg is following through the Brexit process.

The deals showed that even as Brexit dents the U.K. economy, the fledgling online-lending industry continues to grow. In the third quarter, Funding Circle arranged 114 million pounds in net lending to its borrowers. That surpassed comparable loans by U.K. banks, on a combined basis, for the first time.

China

Regulator Assessing Custodian Banks for Online Lenders (Caixin), Rated: AAA

A national inspection team, led by the China Banking Regulatory Commission (CBRC), has recently asked local authorities that supervise online lending to assess commercial banks appointed by P2P platforms to provide custodian services for investors’ funds, multiple bank employees told Caixin.

Credit information platform will lift safeguards (China Daily), Rated: A

The National Internet Finance Association of China recently passed a resolution to jointly launch a personal credit information platform with eight third-party credit service agencies.

The NIFA will hold a 36 percent stake in the forthcoming platform, which is expected to have registered capital of 1 billion yuan ($152 million), and it will invest no more than 360 million yuan in the platform within five years.

The platform will mainly serve online personal lending institutions, in addition to other market players including traditional commercial banks, regulators and third-party credit service agencies.

Chinese Online Lender’s IPO On Shaky Ground (PYMNTS), Rated: A

LexinFintech Holdings Ltd., operator of China’s leading online lender Fenqile, was slated to meet with advisers over the weekend to decide if it will go ahead with a proposed initial public offering (IPO) in the U.S.

According to Bloomberg reports, the company is expected to decide soon if it should launch a roadshow for its IPO or wait until a later time to go public.

European Union

Swedish payment services firm Klarna posts profit rise (Reuters), Rated: AAA

Swedish online payment services firm Klarna, one of Europe’s highest-valued tech startups, on Monday reported sharply higher revenues and earnings for the first nine months of 2017.

Klarna said in a statement its sales rose 24 percent year-on-year to 3.16 billion Swedish crowns ($382 million) in January through September while net earnings climbed 75 percent to 349 million.

New EU rules increases competition and security between banks and fintech (Independent), Rated: A

The European Commission approved rules on Monday to increase competition and toughen up security in how people pay for goods and services across the European Union, pitting banks against financial technology firms.

The rules flesh out an update to the bloc’s payment services law and are among the most disputed in recent financial regulation, sparking intense lobbying as banks and fintech firms clashed over access to customer data.

The revised law comes into force on 13 January, though some of the security elements approved on Monday won’t be binding until September 2019 to give banks and fintech firms time to adjust.

Irish P2P Flender Close to Raising Over €2 Million Through Latest Funding Round (Crowdfund Insider), Rated: A

Irish peer-to-peer lender Flender has reported attracted close to more than €2 million through its latest funding round. This news comes less than a year after the lending platform secured £501,700 through its equity crowdfunding campaign on Seedrs.

International

ETHLend and Brickblock team up for lending on the blockchain (Finextra), Rated: AAA

ETHLend and Brickblock are announcing a strategic partnership to explore the possibilities of lending with Blockchain technology.

A primary focus will be on the tokenization of assets to simplify lending and bring secure real-world assets into the lending procedure as collateral.

The application is ideal for token holders who are in need for liquidity and those who want to participate in a free lending market. Instead of selling and closing a token position, a borrower can easily pledge digital tokens to receive Ether. Moreover, ETHLend is introducing token lending, which enables profiting from down market by enabling short selling market.

Tokenizing real-world assets such as real estate achieves three disruptive objectives:

  1. A strong collateral that can be expected to keep its value for a short-medium time period.
  2. An opportunity for people to collateralise their property with Brickblock, and then using it to secure their loan.
  3. New investment opportunities for downside market by enabling short selling for tokenized real assets.
Australia/New Zealand

Everything you need to know about the P2P lending market (Interest), Rated: AAA

Nearly nine in every 100 loans written through New Zealand’s peer-to-peer (P2P) lending platforms are in arrears, according to the Financial Markets Authority (FMA).

Borrowers responsible for 1,469 loans, worth more than $20 million, are overdue on their loan repayments.

While the bulk of lenders are investing smaller amounts of money (IE under $5,000), 48 have lent an average of $1.54 million each. Totalling $73.84 million, this is equivalent to a quarter of the $289.10 million of loans outstanding (loans that were still within their specified term at the end of the reporting period).

Harmoney – the first P2P lender to launch in New Zealand in 2014 – is also the largest, with 83% of outstanding loans in the market written through its platform.

The FMA’s data also shows there are 207,230 borrowers registered with P2P platforms, 843 of which are repeat borrowers, who have repaid their loans and taken out new ones.

Source: Interest
Source: Interest

FMA publishes benchmark P2P lending, crowdfunding figures (Scoop), Rated: A

The figures show individuals took out $121 million of new loans in the year ended June 30 through P2P platforms and businesses borrowed $31.5 million with total loans outstanding at $259.6 million and $29.6 million respectively as at June 30. Meanwhile, crowdfunding platforms raised $74.2 million from retail and wholesale investors, with 34 successful offers out of 50 in the year.

The data show peer-to-peer lending still pales in significance to the established lending channels, with $10.89 billion personal consumer loans with banks as at Sept. 30 and a further $6.88 billion with non-bank lenders. Business loans with banks totalled $101.61 billion as at Sept. 30 and$4.59 billion with non-banks. Peer-to-peer lenders had 16,977 outstanding personal loans and 92 business loans as at June 30. In terms of asset quality, 1,469 P2P loans worth $20.4 million were in arrears, or 8.61 percent of total loans outstanding, while 833 loans worth $8.5 million were written off.

Fintech firm to undertake study into financial advice (SMSFAdviser), Rated: A

Fintech firm Valuiza will conduct an Australia-wide study of the state of financial planning by gathering feedback from existing clients of practices to measure their experience and intentions. It is currently inviting advice practices to participate in the study.

The data for the report will be collected during January and February next year with practices able to review the results in real time, he said. The results for individual practices will be confidential.

 (The Australian), Rated: B

Peer-to-peer lending platforms RateSetter and Bigstone both called for better disclosure of rates and fees, which are currently expressed in a variety of different ways by industry players. RateSetter chief executive Daniel Foggo said borrowers should be told the cost of the loan expressed as an annual …
India

Are You a Credit Risk? Indian Banks Dig Deep in Your Phone to Find Out (WSJ), Rated: AAA

Indian banks have started mining data on customers’ smartphones for fast loan approval, testing out cutting-edge but controversial technology in what is potentially a huge market for such products.

Long hampered from lending to the hundreds of millions of Indians without credit histories, banks are hoping to slash risk-assessment costs and trigger a new wave of consumer lending with apps that look at everything from Facebook connections to online shopping habits to rate potential borrowers.

India’s most sophisticated banks are working with local and international fintech startups to develop, test and launch a version of a technology used by microlenders in Africa, China and elsewhere.

Source: The Wall Street Journal

Commercial banks had around $1.09 trillion of loans outstanding in September, according to the Reserve Bank of India. Of that, about $270 billion were personal loans, a portion whose growth is outpacing the overall loan market.

But about 40% of HDFC’s 8 million and 12 million loan applications a month are from people without credit histories. Most Indians have never had a credit card or taken a home loan.

What does India’s fintech leader of the year have on her mind? (YourStory), Rated: A

Before she co-started one of India’s few digital EMI startups, Lizzie served as the India head for Wonga, the British payday loan company.  She then joined Development Bank of Singapore to help launch ‘digibank’, the new mobile-only virtual bank of India. Very recently, the India FinTech Awards 2017 named her Woman Leader in the Fintech category.

“I think fintech, especially in India, is one of the most exciting and biggest opportunities in the world. The opportunity here is not just to build huge valuable businesses, but also make a real impact on people’s lives and the economy. I think fintech is taking off in such a big way because the timing is right. It’s such a HUGE problem to solve, and we finally have all the pieces of the puzzle in place – whether it is KYC, mobile adoption or digital payments,” she added.

“I am biased of course, but I expect to see a lot more focus on payments coupled with credit in the form of ‘Paylater’ solutions, EMI solutions and all things related to transactional credit. This is such a great solution for this market where credit cards don’t make sense but consumers are keen to shop,” Lizzie said.

Asia

Japan insurer Sompo sets up fintech base in Tel Aviv (Reuters), Rated: A

Property-and-casualty insurer Sompo Holdings Inc (8630.T) has set up a fintech hub in Israel, becoming the first Japanese insurer to do so in a country where it hopes to tap local expertise in digital and cyber-security technologies.

Africa

Fintech firm Ovamba moves into African commodities exports (Global Trade Review), Rated: AAA

Ovamba, a fintech firm that uses blockchain and other new technologies to connect investors with African SMEs, has facilitated a €30mn deal for the purchase and export of cocoa for Cameroonian commodity marketing company Producam.

Authors:

George Popescu
Allen Taylor