- Today’s main news: LendIt announces finalists to first annual industry awards. OFF3R reports strong growth in UK P2P lending (38%growth in 2016 to £2.653 billion)
- Today’s main analysis: You can’t keep a good crowd down.
- Today’s thought-provoking articles: LendingRobot introduces robo-fund for alt lending. France sees first big loss in RECF.
- LendIt announces finalists for first annual industry awards. AT: “Lending-Times‘ George Popescu was nominated for best journalist coverage. Congratulations, George.” GP:”Thanks ! I am pleasantly surprised Zopa is quite a few categories. Also firms that we haven’t heard much from.”
- LendingRobot introduces first robo-fund for alternative lending. AT: “Only 99 accredited investors can squeeze through when the gate opens.”
- LendingRobot for Advisors. GP:” We wander what exactly do the advisors do in this setup.”
- TD Bank sponsors MIT’s first FinTech hackathon. GP: “I am really curious what they will come up with. The top projects are likely to be a great source, if they are ethical and legal, for the next billion dollar companies.”
- How FinTech can disrupt the $14T mortgage market. AT: “The mortgage market is virtually untapped. There is a short history, but there is plenty of room for FinTech and marketplace lending to tackle this market. SoFi is taking an early lead.”
- The rise of alternative finance. AT: “Very interesting read. As I’ve noted all along, Brexit had an initial impact, but it didn’t take long for UK volume to rebound.”
- OFF3R Index: Very strong growth for UK P2P in 2016. AT: “It goes up from here.” GP:” Personally I think 38% growth is actually not neck breaking and rather a good number.”
- Assetz Capital hurdles 200M BP in SME lending.
- Socially useful finance and regulating P2P lending.
- Tout Perdu: First big loss in French RECF. AT: “One of the downsides to crowdfunding is that potential investors have no way to perform due diligence on private companies seeking funding. You pretty much have to take companies’ word for it that they are a good risk.”
- Linked Finance agrees to funding deal with Eiffel.
- United States
- Finalists Announced for First Annual LendIt Industry Awards (PR Newswire), Rated: AAA
- The First Robo-Fund for Alternative Lending (LendingRobot Email), Rated: AAA
- Lending Robot for Advisors Launches Connecting to Lending Club Platform (Crowdfund Insider), Rated: A
- TD Bank to sponsor MIT’s first fintech hackathon (Finextra), Rated: A
- How Fintech Can Disrupt the $ 14T Mortgage Market (Investopedia), Rated: A
- United Kingdom
- You can’t keep a good crowd down – the rise of alternative finance (altfi), Rated: AAA
- OFF3R Index: Very Strong Growth for UK P2P Lending in 2016 (Crowdfund Insider), Rated: AAA
- Assetz Capital Hurdles £200 Million in Lending to SMEs (Crowdfund Insider), Rated: A
- ‘Socially useful’ finance and the regulation of peer-to-peer lending in the United Kingdom (LSE), Rated: A
- European Union
- Tout Perdu: First Big Loss Hits French Real Estate Crowdfunding Sector (Crowdfund Insider), Rated: AAA
- Lender Linked Finance agrees funding deal with Eiffel (Irish Times), Rated: A
- Govt should allocate funds for infrastructure projects in order to sustain demand (India Info Online), Rated: A
Finalists Announced for First Annual LendIt Industry Awards (PR Newswire), Rated: AAA
LendIt, the world’s largest show in lending and Fintech, today announced finalists for its first annual LendIt Industry Awards. Out of hundreds of applicants worldwide, the selected finalists are all vying for top honors within 18 categories, which celebrate Fintech market leaders, emerging innovators, and top talent. Finalists were chosen based on innovation, emerging talent and top performers.
The finalists will be evaluated by more than 30 renowned Fintech industry experts including CEOs, investors and media. The winners will be announced during the LendIt Industry Awards Show & Dinner taking place on March 7th at the Edison Ballroom in the heart of New York City. In addition to the ceremony, the LendIt Industry Awards evening will include a cocktail reception, a 3-course dinner and live entertainment.
Below are the finalists, per category:
Innovator of the Year
- XOR Data Exchange
Top Consumer Lending Platform
- Marlette Funding
Top Small Business Lending Platform
- Ascentium Capital
Most Innovative Bank
- Cross River Bank
- Goldman Sachs
- ICICI Bank
- Santander Bank
Best Journalist Coverage
- George Popescu, Editor in Chief, Lending Times
- Anna Irrera, Fintech Correspondent, Reuters
- Zack Miller, Founder and Editor, Tradestreaming
- Sean Murray, President and Chief Editor, deBanked
- Oscar Williams-Grut, Senior Reporter, Business Insider UK
- Tony Zerucha, Managing Editor, Bankless Times
See the full list of finalists in every category here.
The First Robo-Fund for Alternative Lending (LendingRobot Email), Rated: AAA
LendingRobot clients can enjoy both superior returns and low volatility, thanks to the combined benefits of the asset class and our machine-learning algorithms, but we think now is the time to move to the next level. This is why, next week, we will launch ‘LendingRobot Series’, the first combined robo-advisor/investment fund ever created for Alternative Lending.
Like a fund, LendingRobot Series will offer automated diversification on multiple origination platforms. Unlike a traditional fund, LendingRobot will improve liquidity, be flexible, and be completely transparent. Uniquely, you will decide how you want your portfolio to be constructed: conservative vs aggressive, short term vs long term.
I highly recommend you to visit https://www.lendingrobot.com/#/series/ to learn more and secure a spot immediately, as we are initially limited by regulatory and business constraints to only 99 accredited investors.
Lending Robot for Advisors Launches Connecting to Lending Club Platform (Crowdfund Insider), Rated: A
Lending Robot, the robo-advisor that connects retail investors to P2P loans, has launched a new product: LendingRobot for Advisors. This new service will help connect registered investment advisors to invest in Lending Club loans.
TD Bank to sponsor MIT’s first fintech hackathon (Finextra), Rated: A
MIT has recruited TD Bank and Prudential to sponsor its first-ever fintech hackathon.
How Fintech Can Disrupt the $ 14T Mortgage Market (Investopedia), Rated: A
Non-bank mortgage lending is expanding as commercial banking declines. In fact, mortgage lending by type of institution shifted dramatically between 2007 and 2014. Recently, commercial banks provided 52% of mortgage lending, down from 74% in 2007. In 2014, mortgage lending by non-banks almost doubled to 43% from 23% in 2007.
Radius Financial Group cracked the fully paperless mortgage code in 2016.
Clara, a California startup, aims to solve some of the mortgage problems that plague consumers seeking to buy a home. Founded by engineer Lukasz Strozek and Jeff Foster, a former policy advisor at the U.S. Treasury Department, Clara strives to smooth out the inefficiencies that accompany the mortgage lending industry. Clara differentiates itself by educating lenders and offering an online portal for completing paperwork.
Lenda, a home-loan provider, also offers a digital mortgage solution. Other digital mortgage lending services include Quicken Loans’ Rocket Mortgage. Then there’s SoFi, the fintech firm known for student and personal loan services, which is also gaining ground in the digital mortgage lending sphere.
A recent JD Power survey found that 62% of respondents under 35 who bought a home this year stated that they’d use a mobile app to complete a mortgage application, if available from their lender.
You can’t keep a good crowd down – the rise of alternative finance (altfi), Rated: AAA
As the graphic clearly illustrates, the past three years have been a period of very strong growth for the sector, and business has grown six- to seven-fold for market leaders Funding Circle and Zopa in that time.
As one might expect, net lending (i.e. originations less redemptions), has been positive and gathering pace over time – a clear sign that investors have slowly but surely embraced P2P lending and Crowdfunding as genuine alternatives to conventional forms of finance.
However, the blip that should be immediately obvious to everyone is the six-month lull around the EU referendum vote in June 2016. While total net lending remained in positive territory (i.e. the industry was growing overall), volumes halved to an average of c.£40m/mth in the months leading up to and immediately after Brexit (versus c.£80m in the six month period prior).
Nonetheless, volumes have rebounded quickly and strongly, and by November 2016, monthly net lending across the four largest P2P platforms had reached a new record of over £100m.
OFF3R Index: Very Strong Growth for UK P2P Lending in 2016 (Crowdfund Insider), Rated: AAA
Today we have numbers from OFF3R that captures the activity of 9 UK peer to peer lending platforms.
According to the OFF3R Index, p2p lending grew by 38% in 2016 increasing by £732 million during the year topping £2.653 billion.
- The European Parliament announced towards the end of 2016 that the Equity Crowdfunding limit for raises on platforms without an investment prospectus would increase from €5million to €8million.
- Greater consistency of financial performance data and clearer vetting of investors may impact the industry.
Assetz Capital Hurdles £200 Million in Lending to SMEs (Crowdfund Insider), Rated: A
Assetz Capital, a peer-to-peer lending platforms, has announced having originated £200 million in loans since launching in 2013. The alternative finance platform targets small and medium-sized UK businesses and also helps property developers acquire funding. Assetz Capital says it is now originating secured loans totaling up to £26 million per month. In Q4 of 2016, Assetz Capital lent over £45 million.
The milestone caps a record year for Assetz Capital, in which over £108 million was lent in 2016. Investors earned a total of £17 million of interest since the platform launched.
‘Socially useful’ finance and the regulation of peer-to-peer lending in the United Kingdom (LSE), Rated: A
These appeals to socially useful finance occurred at a time in which there was also a large-scale expansion of forms of financial activity that could lay claim to meeting some of these criteria. A sub-section of these emerging financial activities—peer-to-peer lending, in which various platforms focus on brokering direct lending agreements between counterparties—has seen particularly impressive growth, with statistics from Altfi showing lending volume across the sector totalling over £7.8bn by January 2017, rising from just £400m in January 2013.
The regulation of the peer-to-peer lending marketplace is therefore of considerable significance, because regulation by the state represents an explicit endorsement that an activity is legitimate and credible as well as providing reassurance that adequate protections are in place.
In sum, then, P2P lenders were successful in lobbying for regulation, providing the industry with reputational legitimacy without stifling industry practices. In contrast to mainstream finance were such appearances of capture have led to accusations of rent-seeking, the case of P2P lending appears to have facilitated financial activities that meet some regulators’ (admittedly modest) understandings of ‘socially useful’ finance.
Tout Perdu: First Big Loss Hits French Real Estate Crowdfunding Sector (Crowdfund Insider), Rated: AAA
According to a report in Capital, real estate developer Terlat has used two crowdfunding platforms to finance projects. Terlat has leveraged both WiSeed and Anaxago – two prominent online marketplaces – to raise capital for six different projects. The report states the company is now at risk of bankruptcy placing approximately €2.6 million raised on crowdfunding platforms at risk.
“[WiSeed] has already received from Terlat a reimbursement of €300,000 out of the €560,000 loaned as part of the project Le Passage.”
Lender Linked Finance agrees funding deal with Eiffel (Irish Times), Rated: A
Irish peer-to-peer lender Linked Finance has agreed a deal with Paris-based Eiffel Investment Group that will boost its access to funding as it seeks to become the biggest non-bank lender to SMEs here.
Eiffel has agreed to contribute up to 20 per cent of funding for new loans listed on Linked Finance’s platform.
Govt should allocate funds for infrastructure projects in order to sustain demand (India Info Online), Rated: A
India’s economic growth is likely to decelerate by 1% to 6.6% this year as per IMF recent release. Government is therefore expected to allocate funds for infrastructure projects in order to sustain demand during the year 2017.
Hence, we expect government to provide tax exemption upto Rs 1,00,000 on investment in alternative investment sources and make provisions towards adjusting loss / non recoverable debt against the respective head.
The move shall encourage individuals to invest in alternative investment platform namely P2P lending which is a high return, medium risk avenue facilitating better returns for the common men at one end and funding support for SME on the other.