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Editorial – Sunday September 18th 2016

This Sunday we are covering 3 subjects : recent good news trend continues, conflicts in data and point of sale financing news.

Recent good news trend continues

The alternative credit market continues to improve week by week. I continue to believe that August marked a turnaround in the market. Here is some more data in that direction:
This week we saw the following good news :

In the same time Octopus, a £6bn asset manager, launched a P2P lender.
And during this time India and China continue to grow tremendously despite struggling with fraud in China and a fairly young market in India.  India’s p2p market is growing at 30-35% per month as can be seen in these examples with data. And in China Fitch claims the Chinese structure finance market is heating up.
And in Canada Financeit, a modern point-of-sale real estate improvement financing platform, partnered with Concentra to acquire TD Bank’s home improvement financing assets. I would expect that the main asset of TD Bank’s home improvement financing asset was their brand which brought inbound leads for financing. The brand was of course not sold/licensed. On the other side, it is unusual for fintechs to purchase bank assets and the deal is very interesting. Financeit and Concentrato must have certain financial and operational means such these assets are more valuable to them than to TD Bank.

Conflicts in data

Another interesting subject for this week has been conflicts in data.
A Bizfi survey shows that small business optimism is improving : Optimism of America’s Small Businesses at Record Hig.
On the other side, Bloomberg data shows that small business optimism is not at a record high:

A C2FO survey claimed that the cost of SME capital is raising and that 18% of respondents in countries like Italy use p2p. We find that hard to believe.

Our readers also wrote in the same directions : “First, this cannot be a representative sample of SMEs in the countries covered – I find it inconceivable that 18% of SMEs in the countries included in the survey have used P2P lending – unless there is a huge selection bias in the sample (in which case the findings should not be stated in a manner that implies they are representative of the SME population).  In Italy. for example, other sources estimate the 2015 P2P volume was less that EUR5m for both invoice factoring and lending combined.  A rare source of P2P info on the Italian market is  You can see that the SME lending volumes they are tracking are minuscule (which makes sense given the onerous regulatory environment for SME P2P in Italy).”
estimated-cost-of-borrower-shot-term-working-capital how-does-your-business-currently-finance-itself

LendKey releases student loan cohort data. The meat of the report in our eyes is the Total Student Default curve we reproduced. We, however, find it strange that defaults are decreasing, and most importantly we find it very strange how fast the defaults are improving. I question the data in this report on this basis and we will seek further clarification.
From our readers: “Sloppy and biased ‘research’ that provides erroneous or misleading claims does not help the industry’s efforts to be seen as a credible, sustainable part of the financial system.  You might want to think about providing a link to the research reports that you cite (I could not find the report by googling, and have asked the company for a copy).  You are pretty good at questioning data that doesn’t seem to stack up, and the data gathered by this survey certainly doesn’t.”

Point of sale financing

A large segment of the alternative credit market is the point of sale financing done by firms like Paypal, Affirm, Bread and more. This market segment is much less crowded than others for unclear reasons.

Quite a few people may not be aware of Klarna. However, Klarna is the company that is dominating this market in Europe and has in the past 2 weeks closed 2 significant deals in the US and the UK to partner with whole organizations of online retailers.  Here is the UK announcement: Klarna is taking over the online  retail (credit?) market.



George Popescu
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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