Feb 22nd 2016 News Digest

UK p2p RateSetter lending money from the wrong fund
US p2p lenders pointing out change in fundamentals in US consumers ?
Cash crunch in marketplace lenders due to ABS market crash in 2016 ?
OnDeck capital earnings release today after close.
Despite recent, sharp falls, online lenders still are priced at large premiums to ordinary banks.

Feb 22nd 2016
Title Description Interest level Publication
RateSetter made peer-to-peer loans from contingency fund UK-based peer-to-peer platform RateSetter has been lending to businesses from a fund set up to protect investors against losses, in a move that triggered complaints from users. On Friday, four days after revealing the practice, the company backtracked, announcing it would stop lending from the fund. AAA Financial Times
The worrying signal from US online lending But maybe something about their borrowers changed. Ram Ahluwalia, chief executive of risk analytics platform PeerIQ, tracks credit across the online lending sector. He has seen “delinquencies uptick mildly in the [second half] of 2015”. “All things being equal, credit risk is vintage specific, and the most recent vintage has a somewhat higher delinquency rate than prior vintages,” he says, with lower-FICO loans experiencing a 2 or 3 times bigger rise than higher-quality credit. The conclusion he draws is that there is “a legitimate economic slowdown that’s affecting the lower credit quality borrowers in the United States”. AAA FT Alphaville
Online lenders see cash crunch The asset-backed securities market is slowing and issued a meager $40 billion in January — the lowest total since at least 2012, according to Dealogic data — and generated a paltry $10 billion in ABS loans in February. Avant CFO claims cost of capital going up. AAA CNBC
Banking on peer-to-peer lending: Looking Glass invests in marketplace loans Looking Glass Investments, a hedge fund buying whole loans in the marketplace lending, evaluated $6.2 billion in potential loans and invested about $21 million in about 10,000 loans in 2015 A Biz Times
New Isa set to boost alternative savings market Four years-plus savings terms could earn you between five and seven per cent. Each platform is different and savers need to do their homework on the key issues of access to cash, fees, and security A Herald Scotland
Marketplace Lending: Block The Noise As is true for any asset class, there are numerous risk factors that can affect investments in marketplace loans: regulation, platform fraud, cyber security, and rate hikes, to name a few. Thus far, fundamentals continue to be strong. A Seeking Alpha
FDIC Dips Its Toes Into Marketplace Lending Marketplace lending offers an attractive source of revenue to banks, the agency recognized, but bank management must "look beyond the revenue stream" to determine whether the related risks align with the institution's business strategy. B Lexocology
DirectMoney Sells $5 Million of Loans to Macquarie Giving Big Boost to Online Lender Australian marketplace lender, DirectMoney, announced that it has sold a total of $5 million of personal loans to Macquarie Group (Macquarie), a provider of financial, advisory, investment and funds management services. According to DirectMoney’s most recent quarterly report the platform held $8.49 million in loans at the end of 2015 thus the agreement with Macquarie represents the bulk of existing loans. A Crowdfund Insider
Pitch Open For Investment Into Landbay Shares Landbay , a real estate crowdfunding site in the UK, is raising again on equity crowdfunding site Seedr and sharing a lot of data. A p2p Banking
The rise and rise of alt-fin Donation-based crowdfunding was the fastest growing model – although starting from a relatively small base (£2 million) the segment was up by 500% to £12 million. “Little more than a collection of plucky startups just six years ago, the sector now does £3.2 billion of business a year,” says Stian Westlake, Nesta’s executive director of policy & research. A Brand-e
The Number of Peer to Peer Lenders in China Declines A report in SCMP states that police are preparing for a “rash of P2P failures” as loans come due. Also noted that during January 79 additional platforms were labeled as problematic but 27 new platforms did enter the sector. A Crowdfund Insider
Institutional investors' share of alternative finance market growing, says new report When asked by researchers about what they perceived as the biggest risks to the future growth of the alternative finance market, 57% of surveyed platforms responded with the potential collapse of one or more well-known players in the market due to "malpractice or fraud". A Out Law
Anticipated Earnings Per Share Decrease for On Deck Capital Inc (ONDK) Wall Street await On Deck Capital Inc (NYSE:ONDK) to release earnings on February, 22 after the close. Analysts forecast EPS of $-0.06, up exactly $0.03 or 33.33% from 2014’s $-0.09 EPS. After releasing $0.05 EPS for the previous quarter, On Deck Capital Inc’s analysts now forecasts -220.00% negative EPS growth. AAA Business Standard Tribune
Why Fintech Firms Aren’t So Different From Banks Despite recent, sharp falls, online lenders still are priced at large premiums to ordinary banks. LendingClub and On Deck trade at 29 and 59 times forward earnings, respectively, versus an average multiple of nine times for the big-four banks. AAA The Wall Street Journal
UK and Continental Europe Volume Origination Growth to Converge? UK vs Continental Europe p2p lending growth rates compared and absolute amounts compared. A Alt Fi Data


Author : George Popescu

About the author

George Popescu

Serial entrepreneur.

George sold and exited his most successful company, Boston Technologies (BT) group, in 2014. BT was a technology, market maker, high-frequency trading and inter-broker broker-dealer in the FX Spot, precious metals and CFDs space company. George was the Founder and CEO and he boot-strapped from $0 to a $20+ million in revenue without any equity investment. BT has been #1 fastest growing company in Boston in 2011 according to the Boston Business Journal and the only company being in top 10 fastest in 2012-13 as it was #5 in 2012. BT has been on the Inc. 500/5000 list of fastest growing companies in the US for 4 years in a row ( #143, #373, #897 and #1270). After the company sale in July 2014 until February 2015 George was Head-of-Strategy for Currency Mountain ( ), a USD 100 million+ holding company focused on retail and medium institutional currencies, precious metals, stocks, fixed income and commodities businesses.

• Over the last 10 years, George founded 10 companies in online lending, craft beer brewery, exotic sports car rental space, hedge funds, peer-reviewed scientific journal ( Journal of Cellular and Molecular medicine…) and more. George advised 30+ early stage start-ups in different fields. George was also a mentor at MIT’s Venture Mentoring Services and Techstar Fintech in NY.

• Previously George obtained 3 Master's Degrees: a Master's of Science from MIT working on 3D printing, a Master’s in Electrical Engineering and Computer Science from Supelec, France and a Master's in Nanosciences from Paris XI University. Previously he worked as a visiting scientist at MIT in Bio-engineering for 2 years. George had 3 undergrad majors: Maths, Physics and Chemistry. His scientific career led to about 10 publications and patents.

• On the business side, Boston Business Journal has named me in the top 40 under 40 in 2012 in recognition of his business achievements.

• George is originally from Romania and grew up in Paris, France.

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