Monday March 20 2017, Daily News Digest

lending club delinquency rates

News Comments Today’s main news: Experian, Finicity collaborate on MPL digitalization. RateSetter, Zopa among P2P lenders signed up on Bud. Lending Works launches 3-minute loan app. Creditas taps asset-backed market to fund auto loans. Today’s main analysis: PeerIQ performance monitor. OCC FinTech Charter: A new model for tech-enabled financial services? Today’s thought-provoking articles: Why CommonBond’s CEO says OCC charter […]

lending club delinquency rates

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News Summary

United States

Experian and Finicity collaborate to digitize marketplace with less tedious experience for consumers and lenders (Yahoo! Finance), Rated: AAA

Experian®and Finicity have joined together to make it easier for consumers to apply for a loan, accelerating loan underwriting and broadening loan availability. The new technology also improves accuracy and reduces fraud risk for lenders. Experian’s new Digital Verification Solutions will deliver verification of assets and verification of income leveraging Finicity’s data aggregation and insight platform. Experian is the first credit bureau to implement this technology, which will give consumers the opportunity to secure mortgages as well as other types of loans with less paperwork and hassle by connecting with financial institutions digitally.

By digitizing the end-to-end mortgage process, loan approvals that take as long as 70 days, may be approved in as little as 10 days. With Experian’s industry-leading credit decisioning and Finicity’s account insights technology, consumers can rapidly complete the income and assets verification process through a simple digital experience.  Consumers will then permit delivery of appropriate account data, which is pushed to Experian’s Decisioning as a ServiceSM hosted platform. This will give lenders the ability to integrate consumers’ account data into their credit decisioning processes. As a result, lenders and other service providers will assess a consumer’s ability to pay and verify borrower income and assets in a manner compliant with the Fair Credit Reporting Act (FCRA).

Experian and Finicity’s partnership also will benefit the approximately 25 percent of the U.S. population with limited or no credit history, including millennials, who are the largest segment of the workforce and are increasingly applying for loans. While these consumers may have a limited credit history, most consumers have a checking and savings account, as well as other payment obligations such as rent, and utility and phone bills, which can demonstrate they are capable of repaying a loan.

PeerIQ Performance Monitor (PeerIQ), Rated: AAA

  • Lending Club targeted the most significant increases in borrowing rate to riskier borrowers in E, F, and G-grades. Prosper’s recent borrowing rate increases are mild comparing to Lending Club’s rate actions. We expect that the overall borrowing interest rates will continue to increase in response to hikes in Federal Funds rates
  • For Lending Club’s 36-mo and 60-mo products, delinquency rates continue to trend higher for 2016 vintage. We expect loans to approach peak delinquency after ~13 months of seasoning; for Prosper, we expect the 36-mo product to hit peak delinquency about 9 months of seasoning and 13 months for the 60-mo term product.
  • For both Lending Club and Prosper, charge-off rates continue to be elevated for loans in 2016 vintages. The spikes in charge off rates agree with delinquent loan pipelines as loans transition from delinquency to charge-off states. (We note that recent credit buy box tightening will not show up in the 2016 vintage).
  • We expect that originators continue to adjust pricing and credit modeling based on forward-looking credit market, Fed Funds rate expectations, the credit environment andthe competitive landscape in consumer unsecured lending.

See the full report here.

Why CommonBond’s CEO says fintech charter could be a game changer (American Banker), Rated: AAA

For the founder of an online lending startup, David Klein, CEO of CommonBond, talks like a sage.

The bearded entrepreneur notes approvingly that the conversations in his industry are becoming “more grounded and mature, rather than all about going to chase the shiny object,” and that company valuations are “catching up to reality.”

What’s new at CommonBond?

DAVID KLEIN: One of the things we are most excited about is what we call the 401(k) for student loans. This is SaaS-based technology that enables employers to contribute to their employees’ student loan repayment every month.

It is very early days, so only about 4% of companies have a student-loan-related benefit. That number is expected to be over 20% in two years.

Over 70% of millennials have student loan debt. Over 50% are thinking about student loans are thinking about them more than retirement and about 80% of them would choose a company to work for if they had this benefit.

In some of your talks over the last year or so, you’ve hypothesized that the number of marketplace lenders would soon shrink. Has it happened the way you thought it would? Have many hung on longer than you thought?

For online lending, 2016 was a year where the strong got stronger and the weak got weaker. There were a few shops that closed up and there were some players that became better known and entered 2017 stronger than ever. I think that continues in 2017 and 2018, regardless of geopolitical or macroeconomic picture, because if you study the emergence of industry, that’s what tends to happen.

What’s the key to that default rate? Are you chasing only the HENRYs?
We look at past credit and future prospects. We look at credit reports and FICO scores, but we look at cash flow, employment, industry of employment. We are looking at a host of factors.

What are your thoughts on the OCC’s proposed fintech charter?

The OCC charter would allow us to comply with regulation in one jurisdiction, instead of 51 jurisdictions including D.C. To the extent that we can save on costs, we could pass that along to customers.

It would affect capital costs. We might get access to low-cost deposits like banks do, we might get access to the Fed discount window to get close-to-free money and we might get access to better pricing in the capital markets by being a chartered institution. We’d be poised to significantly lower our cost of capital long term.

The OCC FinTech Charter: A New Model For Tech-Enabled Financial Services? (Payment Law Advisor), Rated: AAA

On February 21, DWT Payments team members Andy Lorentz and Tom Scanlon took part in a discussion organized by NYPAY that focused on the prospects of the OCC special purpose fintech charter.

View the presentation here.

The 5 Best ‘Alternative Investments’ to Consider (Newsmax), Rated: A

Private equityThese investments aren’t publicly traded or listed on the stock market. Private equity or venture capital firms invest in venture capital, start-ups, company growth, or restructuring of a company.

Real estate — Investing in property may include housing, apartment complexes, and commercial real estate. The Wall Street Journal explained that some self-directed individual retirement accounts allow people to diversify their investments into real estate, among other options, but there are many rules and risks. You also can invest in property indirectly through real estate investment trust (REIT) funds, which are available on public exchanges.

NEW REPORT: What’s The Ticket To Platform Payments Success? (PYMNTS.com), Rated: A

Radial, for example, an omnichannel technology and sales platform provider, recently debuted a new deferred payment option called Buy Now, Pay Later. The new payment feature, the result of a collaboration with European solution provider Klarna, allows customers to spread payments out over the course of six to 36 months. Similarly, fundraising platform Virgin Money Giving and payment processors Worldpay recently collaborated on a new payments system designed to handle the high number of donations that are made in the days and hours leading up to major events such as the London Marathon.

Meanwhile, PayPal looked to improve its platform with a new acquisition. The company announced plans to acquire multichannel bill payment processing and receivables company TIO Networks for a total of $233 million, according to reports.

Financial Poise™ Announces “EQUITY CROWDFUNDING,” a Four-Part Webinar Series, Available On-Demand Now through West LegalEdcenter (Benzinga), Rated: B

Financial Poise™ Webinars and West LegalEdcenter are pleased to announce the on-demand premiere of a new webinar series “EQUITY CROWDFUNDING 2017,” designed to introduce attorneys and business owners to the basics of investing in private companies through crowdfunding. Moderator Chris Cahill of Lowis & Gellen joins panelists from firms including Crowdcheck, CFX Markets, Crowdfunding Lawyers.net and Riggs Davie in Episode #1, Title III, Regulation A+, and State Crowdfunding Regimes.

Nasdaq Announces Development Role In Shaping Ad Contracts Blockchain (Yahoo! Sports), Rated: B

Securities exchange operator Nasdaq has announced it is helping to compile a blockchain for ad contracts, in partnership with the New York Interactive Advertising Exchange.

The blockchain is billed as being a transparent market mechanism for advertisers and publishers to set up ad contracts, creating a more fluid, price-driven environment for digital advertising.
It is hoped that the new system will provide a more efficient basis for the wider digital advertising industry, said to be worth in excess of $32 billion per year.
Nasdaq has already filed patents for its technology, in addition to launching its own private market Linq, powered by the same infrastructure, back in 2015.
United Kingdom

RateSetter and Zopa among P2P lenders signed up to money platform Bud (P2P Finance News), Rated: AAA

SIX PEER-TO-PEER lenders including RateSetter and Zopa have partnered with Bud, a new online platform and app that enables consumers to manage their finances on a single dashboard.

Zopa, Landbay and Assetz Capital have all got live pages on the platform, meaning that Bud’s customers will be able to manage their P2P loans alongside their bank accounts, pensions, mortgages and other investments.

LendingWell, Lending Works and RateSetter have also signed up to Bud, although their pages have not gone live yet.

Bud currently has 18 partners operational on the site, with another 20 signed up.

Walsh said that Bud is currently in talks with other P2P platforms.

It has been in its ‘beta’ testing phase since November and currently has around 4,000 customers signed up.

P2P lender launches three-minute loans through app (Bridging&Commercial), Rated: AAA

A fintech app has partnered with peer-to-peer (P2P) platform Lending Works to offer loans in just three minutes.

Revolut customers will now be able to apply for between £500-5,000 in credit in two minutes and receive funds on their contactless card almost instantly.

The London-based company also plans to enable a P2P lending marketplace among its own user base of 530,000 Europeans, ultimately allowing customers to lend and borrow money across borders.

RateSetter funds SME acquisition in the South East (P2P Finance News), Rated: AAA

RATESETTER has channelled £140,000 to fund a small- and medium-sized enterprise (SME) acquisition in the South East, as part of its focus on business lending in the region.

The peer-to-peer finance platform has arranged two loans to enable Thame-headquartered digital marketing agency Purple Frog acquire Oxfordshire neighbour OXLink, an IT specialist that will help it scale up its operations.

Zopa Celebrates Plus Products 1st Birthday (Crowdfund Insider), Rated: AAA

On Friday, peer-to-peer lender Zopa celebrated the one year birthday of its product, Zopa Plus, by taking a look back at its progress over the past twelve months.

While revealing how Zopa Plus has performed to date, the Zopa team explained that the product is performing in line with expectations. Although each individual investor has different Plus experiences, 73% of investors have notably invested for an average of at least six months, with no loan sales, have achieved actual returns of at least 6%.

Fintech Startup CurrencyCloud Raises m in Series D Funding Round (Finance Magnates), Rated: A

UK-based fintech company CurrencyCloud, a cross border payment-as-a-service provider, announced the raising of £20 million (US $25M) in Series D funding round. The company has raised from backers a total of £44 million ($61 million) in venture funding to date.

The firm has amassed an impressive roster of investors which this time included Alphabet’s venture arm GV, formerly Google Ventures, in addition to existing investors Notion Capital, Sapphire Ventures, Rakuten FinTech Fund, and Anthemis.

MarketInvoice names Zopa’s Giles Andrews as chairman (P2P Finance News), Rated: A

ZOPA co-founder Giles Andrews OBE has been appointed chairman of MarketInvoice, to help support the peer-to-peer invoice finance platform’s plans for growth this year.

Andrews will work directly with MarketInvoice’s co-founders Anil Stocker and Ilya Kondrashov to drive scale in the business, as well as chairing and managing the board of directors, the company said.

The high-profile appointment comes at a pivotal time for MarketInvoice, as it is looking to double its lending to £2bn this year.

 

Merseyside Pension Fund finances Canary Wharf development (IPE), Rated: A

The Merseyside Pension Fund has backed a £12m (€13.8m) loan secured against a development in Canary Wharf.

The £6.8bn public sector scheme has partnered with LendInvest on the deal.

The loan will help finance a planned development in London’s Docklands, which will include a 320-bedroom hotel and 199 residential units.

Digital Disruption Has Arrived In FinTech (Forbes), Rated: A

ClearBank, the first new clearing bank to be authorized in the UK in over 250 years launched on February 28th.

It is the only UK clearing bank that does not offer services direct to the consumer – a neutral and independent platform service that does not compete with its own customers.

There are big incentives for FinTechs and incumbents to use ClearBank. Put simply, they will be able to process payments and offer new competitive transactional banking services more cost effectively, efficiently and faster than has ever been possible.

I suspect ClearBank will be on the radar of everyone in the global FinTech ecosystem.

Blockchain, Distributed Ledger, Artificial Intelligence, and Identity technologies all promise to deliver technology enabled disruption, but appear to be slow out of the starting blocks with adoptable and scalable use cases. ed on February 28th.

Crowdfunding platform becomes Sharia-certified (Bridging&Commercial), Rated: A

Crowdfunding property investment platform Yielders has secured full Sharia certification from the UK Islamic Finance Council (UKIFC).

Launched in April 2016, Yielders specialises in pre-funded investment opportunities with pre-defined rental incomes, enabling investors the chance to start earning returns almost immediately.

How to find your way through the Isa maze (This is Money), Rated: B

Over the years, Individual Savings Accounts – Isas for short – have helped millions of people build long-term wealth they can access tax-free and at any time (unlike a pension).

But the Isa is about to get a major facelift which will make it a more exciting proposition than ever before.

From the beginning of the new tax year on April 6, a family of four – with two children under the age of 18 – will between them be able to squirrel away a maximum £48,256 in Isas over the course of 12 months.

Australia

AI automation FinTech startup Presagen secures competitive commercialization funding (Newsmaker), Rated: A

AI automation FinTech startup Presagen has secured its first round of funding as part of the South Australian Early Commercialization Fund  (SAECF), which is administered by TechInSA. SAECF is a new government grant funding scheme for companies with innovative technologies that have potential for global markets and large revenues. Presagen has been awarded the first of three possible phases of funding. Companies that are awarded all three phases can receive up to $500,000 in funding to support global commercialization initiatives. Presagen will use the funding to bolster its growing technical team.

Presagen uses a unique behavioral AI technique which emerged from the defense industry to automate complex human-centric tasks using software.

China

China, Blockchain & The Holy Grail of Marketplace Lending (CoinDesk), Rated: AAA

When one of the world’s largest corporations gets together with one of its largest peer-to-peer (P2P) lenders, you can almost hear the market sit up.

That’s what happened last week, when Chinese conglomerate Foxconn joined forces with P2P lender Dianrong to launch a blockchain platform for working capital. The benefits to supply chains are clear: smoother cash flows for suppliers will strengthen their liquidity, lower their costs and avoid delays in delivery due to lack of funding.

Should this change occur as projected, investment is likely to migrate to the stronger P2P lenders, shrinking the pool of potential borrowers.

The opportunity to lend to entities with a better-than-average risk profile at a reasonable return is the ‘holy grail’ of marketplace lending.

Peak Establishes New Fintech Subsidiary in China (Military-Technologies), Rated: B

Peak Positioning Technologies Inc. (CSE: PKK) (OTC PINK: PKKFF) („Peak” or the „Company”) today announced that the Company has established a new fintech subsidiary in Shanghai.

India

RBI likely to add tough riders to regulate P2P growth (India Times), Rated: AAA

The Reserve Bank of India (RBI) is expected to introduce strong riders to prevent the nimble peer-to-peer (P2P) lending industry from growing rapidly and suffering the same fate it did in many countries where P2P almost ended up looking like a ponzi scheme.

The RBI, which is expected to release the guidelines on the industry soon, believes that while the sector is yet to show much scale and traction, there should be a strict vigil on its functioning.

The regulator is worried about some cash-based unscrupulous lenders joining these platforms and lending at high interest rates, and would prefer institutional lenders to enter the space and perhaps reduce rates.

Credy looks to digitize personal lending in India  (TechCrunch), Rated: B

Lending platform Credy is looking to change the way people gain access to personal loans in India. The company, which is currently a part of Y Combinator’s Winter 2017 batch, is digitizing the process and improving access to capital for residents by opening up peer-to-peer loans to a wider group of borrowers and lenders.

With all that in mind, Credy has emerged to improve personal lending in a market that is worth $50 billion and is growing at a 30 percent rate.

South America

Brazil’s Creditas taps asset-backed debt market to fund auto loans (Reuters), Rated: AAA

Brazilian financial technology company Creditas Soluções Financeiras Ltda tapped the asset-backed debt market to raise 50 million reais (US$16 million) for auto loan refinancing, its chief executive said, an area shunned by traditional lenders after soaring delinquencies.

Sergio Furio said the transaction in February was the first in which Creditas fully decided collection and credit scoring procedures. Proceeds will go to refinance borrowers at a fraction of the cost of auto loans from banks.

Consumers in Latin America’s biggest country pay an average 190 percent a year for unsecured overdraft, credit card and consumer loans with banks.

Secured personal credit accounts for 1 percent of Brazil’s outstanding lending, a sign large banks have overlooked a segment that could thrive as benchmark domestic interest rates approach single-digits.

Asia

Our fintech future (Bangkok Post), Rated: A

In a digital world where the exchange of money is being revolutionised, banks are stepping up their collaboration with financial technology specialists to shape the future of financial institutions along with their security and data collecting systems.

While the internet has made banking much easier for consumers, it can also be a gold mine for hackers. In the old days they were simply called thieves, and they are breathing down the necks of banks, which are racing to find ways to make security cheaper and more effective. This is where fintech comes in.

In addition to working with fintech innovators on security systems and on ways to make customers’ banking experience better and faster. Mobile applications and various other electronic payment systems besides the ATM are the top examples that come to mind.

The Malaysia-based bank is broadening its fintech reach by joining with the likes of Samsung Pay and Go-Jek, a transport, logistics and payments startup in Indonesia, to provide more payment channels. It is also collaborating with the Thai mobile market leader Advanced Info Service for a mobile point of sale application, an e-wallet system for mobile money transfers, as well as Touch N’ Go, whose customers include Malaysian tollway operators, and the shopping portal Lazada for e-commerce payments.

US-based IDC provides market intelligence, advisory services and events for the information technology, telecommunications and consumer technology markets.

Artificial intelligence (AI) applications used to collect and analyse this personal information are getting smarter every day, opening more opportunities.

Mobile banking applications can be about providing services such as information about exchange rates or locations of businesses since it is not always about money transactions.

Authors:

George Popescu
Allen Taylor

Thursday March 2 2017, Daily News Digest

alternative lending

News Comments Today’s main news: Funding Circle raises $100M . Upstart Raises $32.5M. Lendio offers MPL franchise program. Proplend gains FCA approval.  Monexo to start 1 min loan approval process. Today’s main analysis: FT Partners’ CEO Monthly Alt Lending Market Analysis. Today’s thought-provoking articles: International P2p lending statistics. China to regulate P2P lending platforms. United States FC receives extra $100M from […]

alternative lending

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United States

United Kingdom

European Union

China

India

Asia

News Summary

United States

Funding Circle Receives Additional $ 100 Million From CIM Through U.S. Business Multi-Year Agreement (Crowdfund Insider), Rated: AAA

SME lender Funding Circle announced on Wednesday that Community Investment Management (CIM), an investment firm focused on marketplace lending, will finance an additional $100 million in loans to businesses originated through Funding Circle in the U.S. According to the online lending platform, the multi-year agreement will allow it to provide further injection of capital into the country’s small business sector.

Since its launch in 2010, investors on Funding Circle, which includes 60,000 individuals, financial institutions, government, and the listed Funding Circle SME Income Fund, have helped more than 25,000 businesses globally access $3 billion in transparent and affordable financing.

Lendio Announces First-of-Its-Kind Marketplace Lending Franchise Program (Benzinga), Rated: AAA

Lendio, the nation’s leading marketplace for small business loans, today announced it is expanding the reach and availability of its small business lending options with the launch of a new franchise program.

The Lendio franchise program complements the company’s core value of helping small business owners fuel the American Dream. Through this program, franchise owners across the country can ease the financial hurdles for small businesses in their local community. Lendio franchisees get access to Lendio’s marketplace and technology, comprehensive training, branded marketing tools and national advertising, partnerships, and access to Lendio’s franchise support team to help coach small business owners through the lending process.

Lendio currently has franchisees in five territories, with significant interest in many others. Partners Kyle Bohrer and Bryan Gealy, in Erie, Pennsylvania, joined Lendio as the first franchise owners. Bohrer has been in the small/mid-sized business marketplace for over 10 years. Located in the Great Lakes region, Bohrer has been working on saving Erie small business owners money on their shipping.

FT Partners’ CEO Monthly Alternative Lending Market Analysis (March ’17) (FT Partners), Rated: AAA

Earlier this week, FT Partners announced one of the largest deals in 2017, Prosper’s $5 billion loan purchasing agreement with a consortium of investors that includes affiliates of Third Point, New Residential Investment and Soros, among others. This highly strategic transaction for Prosper aligns investor interest by including an equity structure tied to loan purchasing volumes. The transaction highlights FT Partners’ continued strong track record in advising on the most significant and complex deals across the FinTech ecosystem.

Introducing the First SaaS Lending Platform (Upstart Email), Rated: AAA

by Jeff Keltner, Head of Business Development, Upstart

Those that know my history at Google will understand why I’m excited to tell you about Powered by Upstart, a Software-as-a-Service offering derived from Upstart’s top-rated consumer lending platform. From rate requests through servicing and collections, this new service brings modern technology and data science to the entire lending lifecycle.

Our beginnings

Anna, Paul, and I founded Upstart to bring the best of Google to consumer lending. Upstart was the first platform to leverage modern data science and technology to power credit decisions, automate verification, and deliver a superior borrower experience. In 2014, we were first to launch next-day funding . As of today, more than 20% of our loans are fully automated and we expect this percentage to increase significantly through 2017. With more than 50,000 Upstart loans originated, we have the highest consumer ratings in the industry and have delivered industry-leading returns to loan investors. With Net Promoter Scores (NPS) in excess of 80, we’re excited about the impact we’re having.

Technology partner

FinTech is disrupting all areas of financial services. As a leading tech platform in marketplace lending, Upstart aims to partner with financial institutions rather than compete with them. Given the pace of change in lending, technology partnerships will be critical in the years to come, and Upstart aims to be a partner the industry can rely on.

But Powered by Upstart is not just software – it’s a turnkey solution that provides all necessary document review, verification phone calls, fraud analysis, and (optionally) customer service, loan servicing and collections.

Software-as-a-Service in lending

SaaS has grown exponentially in the last decade because of its obvious virtues: rather than buying, installing, configuring, hosting, and supporting software yourself, the software is delivered over the cloud. It’s more reliable and always up to date. Delivering cloud software can be challenging in any industry. Usability, reliability, and performance are the minimum to play, and effective change management is critical to success. As the team that delivered Google’s SaaS platform before it was called cloud, we understand these challenges.

Of course, the regulatory environment in lending raises the bar even higher. We’ve long demonstrated our commitment to trustful and compliant lending, and we’re likewise committed to delivering robust and compliant lending software. We’ll be at the LendIt show in New York City next week, so please come visit our booth to learn more about Powered by Upstart!

Klarna: Financing Better Customer Experiences (PYMNTS.com), Rated: A

Swedish payment processor Klarna has recently made news when it expanded the options and the channels that it makes its point of sale financing options available to.

Billingsley explained that in the case of GhostBed, the revolving credit product provided by Klarna helps turn a one-time mattress sale to its customers into a customer who comes back to purchase accessories.

According to Billingsley, that’s possible because it enables eligible consumers to make additional purchases with that same retailer without having to sign up for another loan or go through the financing process all over again for each subsequent transaction made.

Either the new purchases can be added to their existing credit account or they can simply use a different form of payment for the transaction.

Billingsley noted that the financing solution also works without any redirect to an external URL, so the consumer remains on the merchant site and within the brand experience when signing up.

Depending on the customer segment and even the merchant itself, utilizing Klarna’s full checkout solution isn’t exactly what they need. Which is why, Billingsley noted, the company is pushing its payment APIs, which allow merchants to add Klarna’s proprietary payment solutions directly into their existing checkout.

As for Klarna’s power users, the two biggest consumer populations are millennials and females in their mid-30s who are usually in charge of their family’s purchases.

Billingsley pointed out that many millennials today either don’t have a credit card or don’t like using one — their affinity for credit card brands and status is much different from previous generations. This makes millennials much more willing to use a payment option that allows them to break up payments over time for major purchases.

In the case of the young mother who manages her household’s income, also known as the Household CFO, she typically sees it as more convenient to make payments over time on a big purchase rather than putting a transaction on her debit or credit card.

Upstart Raises $ 32.5M (Upstart Email), Rated: A

It’s been three years since we launched the Upstart lending platform, and today we’re pleased to announce we’ve raised $32.5M to take our business to the next level. The funding round was lead by Rakuten, a global leader in internet services and global innovation headquartered in Japan, and by a large US-based asset manager. Existing investors Third Point Ventures, Khosla Ventures, and First Round Capital also participated. We’re particularly excited to have Oskar Mielczarek de la Miel, Oskar Miel, Managing Partner of the Rakuten FinTech Fund join Upstart’s Board of Directors.

With more than 50,000 loans originated, Upstart has the highest consumer ratings in the industry, has Net Promoter Scores (NPS) in excess of 80, and has delivered industry-leading returns to loan investors.

Prominent Fintech Investor & Prosper President Ron Suber Invests in Money360, Joins as Strategic Advisor (Crowdfund Insider), Rated: A

Ron Suber, Prosper Marketplace President and prominent Fintech investor, has taken a stake in Money360 – a fast growing real estate investment marketplace.  Suber will also play an active role as a Strategic Advisor to Money360 to help boost platform growth.

Suber explained;

“I have been investing in the loans from Money 360 for my personal family office for many months. I have enjoyed the risk-adjusted returns, investment structure and liquidity options. Upon completing additional due diligence, I have decided to personally buy equity in the company and become a strategic advisor to the management team/Board of Directors. 

Labor Dept proposes delaying new rule for financial advisers (Reuters), Rated: A

The U.S. Labor Department has taken a first step toward possible derailment or dilution of its controversial rule on retirement advice as it begins to re-examine it at the directive of President Donald Trump, according to a notice made public on Wednesday.

The department proposed a 60-day delay of the fiduciary rule, which requires retirement advisers to put the interests of clients ahead of their own. It was slated to take effect on April 10, but Trump asked the department to review the rule one more time for its impact on investors.

The proposed delay should have a “calming” effect on the marketplace, which had been “hanging in limbo” ahead of the April 10 effective date, said Denise Valentine, a senior analyst with Aite Group, which advises the financial services industry on regulatory issues.

California Hedge Fund Association (CHFA) Announces Rebrand to California Alternative Investments Association (CalALTs) (PRWeb), Rated: A

The California Hedge Fund Association (CHFA) announced that it has adopted CalALTs as its new brand name. The 1,200 member organization, which focuses on fostering growth and advancing the development of California’s alternative investment community, rebranded in response to the strong demand from a broader group of alternative investment managers and a new focus on bringing together and serving a wide range of alternative investment managers across the state of California and beyond.

The alternative investment community in California currently includes over 1,000 firms with approximately $1 trillion in assets under management.

Monroe Capital Selected as the 2016 Lower Mid-Market Lender of the Year by Private Debt Investor (BusinessWire), Rated: B

Monroe Capital LLC was selected as the recipient of the 2016 Lower Mid-Market Lender of the Year Award in the Americas region by Private Debt Investor, a global independent publication based in London covering the private debt and private equity industries. This is the fourth consecutive year that Monroe has been recognized by the Private Debt Investor Awards as a leader in the Lower Mid-Market, Unitranche and Senior Lender categories.

Monroe Capital provides “one-stop” financing solutions for buyout, recapitalization, growth, and refinance transactions in the form of senior and junior loans and equity co-investments, supporting both private equity sponsored and non-sponsored transactions and privately owned businesses. The Private Debt Investor Awards recognize firms in three geographic regions: the Americas; Europe, Middle East and Africa; and Asia-Pacific. Winners were selected by eligible voters among the private debt, private equity and institutional investor communities.

United Kingdom

Proplend gains FCA approval (P2P Finance News), Rated: AAA

COMMERCIAL property peer-to-peer lender Proplend is the latest platform to receive full authorisation from the Financial Conduct Authority (FCA).

Brian Bartaby, chief executive of Proplend, said the firm would now apply for ISA manager status from HMRC but said it was unlikely to have an Innovative Finance ISA (IFISA) ready this tax year.

The lowest risk is tranche A at zero to 50 per cent LTV, tranche B is 51 to 65 per cent LTV and tranche C is 66 to 75 per cent LTV.

Returns on the platform  currently range from five to 12 per cent and borrowers can access loans of between £250,000 to £5,000,000 for up to five years on an interest-only basis. The platform has funded £11.5m of loans so far and has recorded zero defaults.

LandBay, Proplend, & FundingSecure Named Top Three UK Property P2P Lending Platforms (Crowdfund Insider), Rated: AAA

On Tuesday, 4thWay writer, Matthew Howard released his very own assessment on the top three property P2P lending platforms are in the UK. The three he selected were LandBay, Proplend, and FundingSecure.

In his selection, Howard ranked the lenders based on their features and opportunities each platform can provide. He selected LandBay as his first pick because the lender has done over £10 million in P2P loans.

Proplend was selected as Howard’s second pick. He chose the lender due to the lender’s interest rates are even in the lowest-risk “tranche A” range from 5.5% to 7%; more than £10 million has been lent through Proplend; and users may easily identify loans that are for just 50% or less of the property valuation.

FundingSecure was Howard’s third pick. His selection was based on the lender’s record of doing around £100 million in P2P lending, more than half being property loans; offers bridging and property development loans; uses the current valuation, even on development loans; interest rate lenders earn is 12% on all these loans; the minimum that may be lent on each loan is £25.

Fintech startup Yielders becomes first to receive Sharia Compliance Certification in UK (EconoTimes), Rated: A

UK-based fintech startup Yielders announced that it has successfully completed independent Sharia Certification that was conducted by UKIFC and overseen by prominent scholars in the fintech sector.

Britain wants you to be banker, but are you ready for the risk? (The Memo), Rated: A

Plans to bring the risk and returns of peer-to-peer lending into one of Britain’s most popular investment products might provide some welcome relief for entrepreneurs … and some sleepless nights for those taking the plunge.

Following up on a Budget pledge, the government has now published a consultation on including peer-to-peer lending in individual savings accounts (ISAs).

Some 23m people in the UK have ISAs, which make the return from your savings and investments completely (or mainly) tax-free. But 16m people opt to hold just the safer version, cash ISAs, which are tax-free savings accounts with banks, building societies and National Savings & Investments.

Meanwhile, UK households, who hold around 60% of their financial wealth in cash, have borne the brunt of the Bank of England’s low-interest-rate policy. Before the financial crisis, in mid-2007, you could get a return of over 6% a year from a best-buy cash ISA. Today, the best is little over 2%.

However, peer-to-peer lending is more risky than putting your savings in a bank.

This is borne out by a recent poll. peer-to-peer firm Wellesley found that 47% of people surveyed said they would increase their investment in peer-to-peer lending if it could be included in an ISA and 44% if it offered better interest rates than traditional banks.

Another survey, by Opinium in 2012, found 49% of the population would be open to peer-to-peer lending as an alternative to traditional banking.

Advisers’ Robo Face Off (FT Adviser), Rated: B

So last week’s revelation that almost 6,000 people have used LV’s full automated financial advice service since it was launched in summer 2015, maybe shouldn’t be greeted with too much concern by advisers.

Also LV said it was “unable” to reveal how many of the 6,000 customers who paid the £199 for a full statement of advice went on to pay £499 to execute the statement of advice.

That is as maybe, but if our trip to the world of Back to the Future is anything to go by, human beings will – unless they become robotic themselves – still need face-to-face advice.

European Union

International P2P Lending Statistics February 2017 (P2P Banking), Rated: AAA

Funding Circle continues to lead ahead of Zopa and Ratesetter. The total volume for the reported marketplaces adds up to 408 million Euro.

  • Funding Circle reaches 2 billion GBP in originations since launch
  • Fellow Finance crosses 100 million EUR since inception
  • Geldvoorelkaar hits 100 million EUR since inception

China

China looks to better regulate online P2P lending platforms (Technode), Rated: AAA

To help regulate the online P2P lending industry plagued by fraud and embezzlement, the China Banking Regulatory Commission published the Guidelines on Depositing and Managing Online Lending Capital (in Chinese, Guidelines for short) on February 24. In January this year, 1.8 million registered users were unable to withdraw their funds from platform operated by Qiyuan (short for 北京起源财富网络科技有限公司 or “Beijing Qiyuan Wealth Online Technology Limited” in English). The owner of the company, Fang Fan, embezzled the funds invested in the company’s eight different online lending platforms.

The Guidelines is the latest effort by the government to regulate the online P2P lending market which handled RMB 204 billion worth of transactions this February alone. It sets out three major basic principles regarding the safekeeping of the capital gained from P2P lending platforms. The first is that funds invested into the platforms by users must be deposited into commercial banks. The second stipulates that any transaction and reconciliation of the invested funds must be expressly approved and verified by both the debtor and creditor. Lastly, banks and online lending companies must carry out daily reconciliations and keep clear records of the transactions.

India

P2P market place Monexo to start 1 min loan approval process (India times), Rated: AAA

Lending marketplace Monexo has become the first peer-to-peer lending company in India to introduce a 1-minute loan approval process.

The company will leverage its proprietary, self-learning analytics platform as well as its tie-up with CRIF to access credit scores and other relevant financial data to aid in the loan disbursement decision making process, Monexo said in a release.

The borrowers can avail a loan of Rs 50,000 to Rs 5 lakh for tenure of 6 months to 60 months. There is no origination fee or prepayment fee. But the borrower must just pay a success fee of 2.5 per cent if the loan to him is approved and he decides to avail it.

The potential of blockchain technology to eliminate physical currency by ushering in virtual currencies like Bitcoin might be overstated, said Reserve Bank of India (RBI) deputy governor R. Gandhi.

While speaking about currencies, the central banker pointed out that to be effective, a currency needs to uphold concepts of confidence and anonymity at all times. However, after the initial rounds of usage, these concepts cannot be sustained in virtual currencies.

Talking about another major innovation in the financial technology space, marketplace lending or crowdfunding, the central banker noted that after the first few rounds of funding and successes, as a larger number of people get attracted to the concept, the system is likely to collapse. This makes marketplace lending unsustainable for a large number of people or amounts.

Asia

Tera Funding loans grow to top 100 bln won in 2 yrs (Yonhap News Agency), Rated: AAA

The chief of Tera Funding, a peer-to-peer (P2P) property financial service provider, said Thursday that the company’s accumulated loans have surpassed 100 billion won (US$87.6 million) since its launch two years ago.

Authors:

George Popescu
Allen Taylor