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Friday February 16 2018, Daily News Digest

Amazon small business lending
Source: The Wall Street Journal

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News Summary

United States

Amazon has partnered with Bank of America for its lending program (CNBC), Rated: AAA

CNBC has learned that Amazon Lending, which launched in 2011, ultimately found a partner in Bank of America Merrill Lynch, according to people familiar with the matter who asked not to be named because the alliance is confidential. Partnering with Bank of America allows Amazon to reduce its risk and access capital specifically to provide credit to more merchants so they can acquire inventory.

Amazon Lending is an invitation-only program that makes loans of $1,000 to $750,000, with terms of up to a year, for companies that may have difficulty landing traditional business loans. In June 2017, Amazon said it issued more than $1 billion in loans during the previous 12-month period, compared to $1.5 billion in combined loans for the four years prior to that.

Scaling back

But even with the Bank of America deal, Amazon Lending has been tapping the brakes on growth of late. After almost doubling to $661 million in 2016, outstanding loans just barely increased last year to $692 million, according to Amazon’s annual report earlier this month.

Amazon small business lending
Source: CNBC

These 10 MBA Programs Will Earn You the Highest Salary, According to SoFi (Levo), Rated: A

According to SoFi, the student loan refinancing company, “No BS” Return on Education 2018 MBA rankings, these are the best schools for earning back your money.

With Americans owing more than $1.48 trillion in student loan debt,  (which is $620 billion more than the total U.S. credit card debt) knowing which schools are going to help you pay off your debt faster, is something you should consider if you are looking at business school programs.

SoFi MBA schools
Source: Levo

Roostify Closes $ 25 Million Series B To Fund Expansion (VentureBeat), Rated: AAA

Roostify, a digital lending platform provider, today announced the completion of a $25 million Series B round of financing. The round included new investments from Cota Capital, Point72 Ventures, and Santander Innoventures, the venture capital arm of Banco Santander, as well as additional funding from previous investors JPMorgan Chase, Colchis Capital, and a subsidiary of USAA. The new funds will power the company’s ambitious growth goals, including a deeper presence in the enterprise space, rich product enhancements, and expansion into new markets.

Abode Aims to Make Home Buying and Selling Easier (Chicago Inno), Rated: A

In 2016, Kyle Stoner and best friend Carson Junginger were both having a hard time navigating the home-buying process. Between finding a realtor, finding a property and securing a mortgage, the two tech entrepreneurs realized that buying a home was too cumbersome and fragmented. And when they couldn’t find a single platform where they could manage all these separate tasks, they teamed up to create one — Abode.

SoFi named Abode in its 2018 class of SoFi Entrepreneurs, the fourth cohort of startups which will receive mentorship and funding from the alternative lending startup, but Stoner declined to comment on whether SoFi is officially partnering with Abode in the future. Stoner said Abode is rolling out a new consumer product in March 2018, but declined to give further details.

Americans Can’t Get Enough Consumer Debt (WSJ), Rated: AAA

If anything, consumers are borrowing more on credit cards or through auto loans than they have in years, and lenders seeking growth are happy to oblige them.

In the fourth quarter, consumer debt, excluding mortgages and other home loans, rose 5.5% from a year earlier to $3.82 trillion. That is the highest amount since the Federal Reserve Bank of New York began tracking the data in 1999. Moreover, consumers’ non-housing debts accounted for just over 29% of their overall debt load, also the highest amount on record.

Overall, households are paying about 5.8% of their disposable personal income to stay current on their nonmortgage debts, according to third-quarter Federal Reserve data. This figure, which is at the highest level since the end of 2008, bottomed out at 4.9% in 2012.

consumer debt
non-mortgage debt


KPMG International and CREATE-Research have jointly prepared a report about the digitization imperative for alternative investment management.

Early on, its authors list eight key digital innovations that are reconstructing the industry:

Application programming interfaces; cognitive technology and machine learning; Big Data; blockchain; new digital platforms; robo-advisors; robotic process automation; and social media.

To that end they have talked to 125 alternative managers located in 19 countries, with combined assets under management of $2.6 trillion.

A Need to Future Proof

They found that the scale of the ongoing shake-up is well understood. Only 2% of respondents saw a “business as usual” scenario playing out over the next 10 years. Roughly one-third (35%) expect marginal changes. But 53% anticipate “partial” disruption and the remaining 10% anticipate “total” disruption.

KPMG alternative investing

Can small-dollar loans be both profitable and safe? (American Banker), Rated: A

Is now the time when U.S. banks, credit unions and their regulators finally see eye to eye on small-dollar loans to consumers who have checkered credit histories?

A long-running stalemate between the industry and its overseers has ceded much of the subprime consumer market to payday lenders, pawn shops and other high-cost lenders. But in recent months, banks started to get some insight from Washington about what type of product would be deemed acceptable.

Citi, PNC invest in B-to-B payments fintech (American Banker), Rated: A

In the latest example, Citi Ventures and PNC on Wednesday announced a strategic investment in the fintech firm HighRadius, which makes business-to-business payments and receivables software. Terms of the investment were not disclosed. HighRadius has an existing partnership with Bank of America on an accounts receivables platform, and also counts as clients Fortune 500 companies such as Walmart, Johnson & Johnson, Procter & Gamble and Starbucks.

U.S. Bancorp hit with $ 613M in penalties linked to payday lender Scott Tucker (USA Today), Rated: A

U.S. Bancorp, the parent of U.S. Bank, agreed to the criminal and civil penalties in settlements announced by the Manhattan U.S. Attorneys Office in New York, the Office of the Comptroller of the Currency, the Federal Reserve and the Financial Crimes Enforcement Network.

From 2009 until 2014, U.S.Bank set an artificial cap on the number of alerts generated by its customer transaction monitoring systems, authorities said. The Minneapolis-based bank based the number of alerts on low staffing levels, rather than on the level of risk in the transactions.

The lax oversight aided Tucker, a longtime U.S. Bank customer who was sentenced to more than 16 years in prison last month for running an illegal $3.5 billion Internet-based payday lending scheme that victimized thousands of consumers with loan interest rates as high as 1,000%.


Fluid Market Launches Truck Sharing Marketplace (Business Insider), Rated: A

Fluid Market, a neighborhood truck sharing application that allows people to rent trucks seamlessly from one another, today announced the nationwide launch of its truck-sharing marketplace, providing a seamless and on-demand utility vehicle rental experience to its peer-to-peer network of users and lenders across the country.

Finalists for the LendIt Fintech Industry Awards 2018 Announced (Crowdfund Insider), Rated: A

Fintech Innovator of the Year

  • Affirm
  • Varo Money
  • Better Mortgage
  • Upstart
  • Plaid
  • Circle
  • loanDepot

Top Consumer Lending Platform

  • LendingClub
  • Zopa
  • Marlette Funding
  • Marcus by Goldman Sachs
  • LightStream
  • Yirendai

Top Small Business Lending Platform

  • Kabbage
  • Funding Circle
  • BlueVine
  • Mirador
  • Credibly
  • StreetShares

Top Real Estate Lending Platform

  • Sharestates
  • LendInvest
  • LendingHome
  • PeerStreet
  • LendingOne
  • Fundrise

Emerging Lending Platform

  • Upgrade Inc.
  • Better Mortgage
  • ETHLend
  • Neat Capital
  • Nexoos
  • LendingUSA

Excellence in Financial Inclusion

  • Kreditech
  • LendUp
  • LenddoEFL
  • Oportun
  • China Rapid Finance
  • Elevate Credit

Most Promising Partnership

  • Katipult + Polymath Inc
  • Macquarie + PeerIQ
  • Lending Club + Opportunity Fund
  • Intrinio + QUODD
  • Financeit + Goldman Sachs
  • Minna Technologies + Swedbank

Most Successful Cross-Border Partnership

  • Kabbage + ING
  • Kreditech + PayU
  • PayJoy + Macrocel
  • nCino + OakNorth
  • Kasisto + DBS Bank
  • Phoenix Finance + Saxo Bank

Most Innovative Bank

  • BankMobile
  • Cross River Bank
  • Laurel Road
  • CBW Bank
  • Marcus by Goldman Sachs
  • HSBC

International Innovator of the Year

  • UP Financial
  • LexinFintech
  • Afluenta
  • Phoenix Finance
  • IrisGuard
  • Borrowell

Top Enterprise Technology Company

  • Salesforce
  • Roostify
  • Blend
  • ThreatMetrix
  • Mambu
  • CUneXus

Top Emerging Technology Company

  • Nav
  • Ingo Money
  • Nova Credit Inc.
  • MoneyLion
  • dv01
  • Emailage

Most Innovative Mobile Technology

  • PayJoy
  • Clarity Money
  • AutoGravity
  • Dave.com
  • Blinker
  • Juvo

Top Investment Bank in Fintech

  • Macquarie
  • Marlin & Associates
  • FT Partners

See the full list here.

Macquarie looks to broaden US ABS footprint (Global Capital), Rate: B

Macquarie Group is seeking to hire a US ABS director for its credit markets team as it looks to grow its presence in US esoteric ABS sectors, including whole business, marketplace lending and renewable energy finance.

Small nonbanks call for clearer exemption from CFPB audits (American Banker), Rated: A

Nonbank mortgage firms are seeking formal assurance from the Consumer Financial Protection Bureau that they will not become subject to surprise audits or enforcement without involvement of a state regulator.

In a joint letter to acting CFPB Director Mick Mulvaney, the Community Home Lenders Association and the Community Mortgage Lenders of America said the agency should practice “streamlined supervision” of smaller nonbanks, which is consistent with the Dodd-Frank Act.


Business Innovation Could Accelerate Under a Friendlier CFPB, LeClairRyan Attorney Says (Business Insider), Rated: B

Recent moves by the federal Consumer Financial Protection Bureau (CFPB) could signal a friendlier approach to businesses, according to Jay Spruill, a partner in LeClairRyan’s Richmond office and leader of the national law firm’s Marketplace Funding Team.

“The Payday Loan Rule has been heavily criticized by the small loan industry which says the rule will restrict consumers’ access to credit,” Spruill notes in the blog, CFPB Signals Retreat from Aggressive Regulation. The post appears in Marketplace Shift, which focuses on the impact of legal and regulatory developments on financial innovation.

United Kingdom

P2P Lender Lendy Releases Financial Results: Pretax Profits Rise to £3.3 Million (Crowdfund Insider), Rated: AAA

Peer to peer lending platform Lendy has released its audited accounts for 2016, showing profits before tax rising to £3.3 million compared to £53,000 in 2015. The company reports that since launch in 2012, Lendy has originated over £376 million in secured loans generating £36 million in interest for investors. Approximately £141.5 million in principle has been repayed with current outstanding loans at £186.5 million.


The digital upstarts taking on Britain’s dominant few banks (The Economist), Rated: AAA

For some British millennials, Monzo is as close to a cult as a bank can be. Its coral-pink cards are hard to miss. “People in bars will get very excited if they see you are a fellow Monzo user,” says Mr Matthews, who is 29.

Counting the British arm of Santander, Spain’s largest bank takes the share to over 80%. In 2015 Britons had 70m-odd active current accounts. They paid £500 ($750) or more into 70% of them every month.

Supervisors have licensed more than 30 entrants since 2013. But by no means are all the challengers young. One of them, CYBG, owns Clydesdale, a Scottish bank that turns 180 this year, and Yorkshire Bank, aged 159. It has about 1.8m personal current-account customers and assets of £43bn. Nor are all the infants purely digital. Metro Bank has since 2010 established 55 “stores” (ie, branches) and is spreading beyond south-east England.

Among digital purists, Monzo’s chief rival is Starling Bank—where Mr Blomfield used to work. It started current accounts last spring; around 100,000 have been opened. Tandem, which recently acquired Harrods Bank, the banking arm of a posh department store, is also open for business. Atom Bank, part-owned by Spain’s BBVA, focuses on mortgages funded by fixed-rate savings. N26, a German smartphone bank, is due to arrive this year. Another near-cult, Revolut, is seeking a European licence (valid, for now, in Britain).

To ginger up small-business banking, RBS, the market leader, must cede ground and money to competitors as part of the price, agreed on with the European Commission, of its rescue by the government in 2008. RBS will put up £425m, divided into sums from £5m to £120m, to build up rivals’ capabilities, plus £350m for incentives to customers to switch banks. Banks with assets of up to £350bn may bid. That excludes the big four but just lets in Santander (£315bn), to some challengers’ chagrin.


Industry reacts to SME finance inquiry (Bridging&Commercial), Rated: A

Earlier this month, the Treasury committee launched an inquiry into SME finance to look at the state of the market and the lessons to be learned from RBS’s Global Restructuring Group (GRG).

The Treasury’s inquiry will look at the extent of competition in the market, the various sources of funding available to SMEs – including P2P lending and crowdfunding – and whether the current regulatory framework provides enough protection to SMEs when they borrow money.

For example, unsecured lending to an SME borrower for the purposes of their business will only be regulated if the SME is unincorporated and the amount being borrowed is £25,000 or less.

The UK’s Financial Conduct Authority doubles down on algorithmic trading (Crowdfund Insider), Rated: A

The UK’s Financial Conduct Authority (FCA) on Monday published its report on the supervision of algorithmic trading, which is intended to illustrate best practices and give guidance to firms considering implementing AI to automate trading operations.

The focus areas of the report hint at concerns the FCA harbors about AI use in capital markets. The regulator placed particular emphasis on humans being able to intervene in an algorithm if something goes wrong, and ensuring the technology doesn’t start behaving in a way unintended by its creators.

banks ai

Innovate Finance Announces Finalists for 2018 FinTech Pitch360 (Crowdfund Insider), Rated: B

The 2018 Pitch360 finalists are the following:

  • Artificial Intelligence: Axyon AI SRL, Coriolis Technologies Ltd, Eye Capital S.A.
  • Banking/ Enterprise Solutions: Akoni, Hedgewiz Pure Risk Management Solutions, Salt Edge Inc
  • Distributed Ledger Technology: hiveonline, SPIRAL
  • Financial Inclusion: CommuScore, CreditSpring, Trezeo
  • Payments & FX: Duality Banx, Divido Financial Services, Envision&Company LTD
  • Peer-to-Peer / Alternative Funding / SME Lending: Alterest, Credit Data Research Ltd, StrideUp
  • Personal Finance Management & Robo Advice: CASHOFF Ltd, Bedaan
  • RegTech: Calcabis, Exate Technology


Hexindai: Positive Quarter Strengthens Bull Case (Seeking Alpha), Rated: AAA

Sales increased 575% to $43.31 million, driven by loan facilitation growth, which was $388 million – an increase of 187.1% over the prior year. The high sales growth rate contributed to a whopping 1,589% net income growth, which was $26.9 million for the quarter. Gross billing ratio contributed to overall growth with an increase from 7.4% in the previous year to 12.1% in the reported one as the company continues its shift to credit loans.

The company increased its guidance, bumping EPS estimates for the year from $0.74 (see linked article for full estimate calculations) to $1.30 per share, as sales are now expected at $108 million – up from previously expected $90 million. The company believes this will be driven by a bump in loan facilitation, which it expects to be $1.23 billion, up from previously expected $1 billion.

In my previous article I initiated the company with a price target range of $14.80 to $22.20 per share given a 20x to 30x forward earnings multiple, and given recent positive catalysts I believe fair value lies in the same multiple. As the company has hiked its sales and net income guidance, pushing EPS to $1.30 for fiscal 2018, I believe the company’s fair value now lies in the range of $26.00 to $39.00 per share. That represents almost 200% upside from the current share price.

Money20/20 launches in China, the world’s biggest FinTech market (CUInsight), Rated: A

Ascential announced in Hangzhou recently the launch of its trailblazing FinTech event Money20/20 at Hangzhou International Expo Center on 14-16 November 2018.

Guest speakers includedArthur Zhu, President of LianLian Pay; Raymond Qu, CEO of Geoswift; Jeff Parker, Managing Director of WorldFirst Asia-Pacific; Eric Gu, founder & CEO of Metaverse; and experts such as Dr. Ben Shenglin, Dean of Zhejiang University’s Academy of Internet Finance.

Chinese ADSs on the Rise (Capital Watch), Rated: B

Coming in second and third place, China Rapid Finance Ltd. (NYSE: XRF) and JP Holdings Ltd. (NYSE: JP) both soared 8 percent to close at $5.17 and $19.85 per share, respectively, while Jianpu Technology Inc. (NYSE:JT) rose nearly 6 percent to $7.28 per share.

European Union

Online Lender Lendix Plans Entrance into German and Dutch Markets (ICO News Desk), Rated: AAA

Continuing its plan to lead the European SME lending market, fintech company Lendixcontinues its geographical expansion with plans to branch into Germany and the Netherlands.

bitJob teams up with the Dutch government blockchain program to enrich students résumés with a crypto flair (Chipin), Rated: A

bitJob, the P2P marketplace that connects students and businesses, is announcing today its partnership with the Blockchain projects division inside the Dutch government, to deploy its pilot project in Holland. The marketplace, developed by bitJob, bridges the gap between businesses and students by enabling both sides to offer/look for employment with a technology that promotes honesty, immediacy, and robustness.

Opiria & PDATA token: peer reviewed token sale from Germany (Opiria email), Rated: B

Opiria allows consumers to sell their personal data and companies to buy personal data directly from consumers without a veiled middleman in a fully transparent and secure way.

  • We have a working product since December 2016: www.opiria.com

  • We have many existing Fortune 500 customers: BMW, Audi, Mercedes, Volkswagen, GM, Nissan, P&G, Intel, Freightliner

We are presently running an ICO. About our ICO:

  • peer reviewed with due diligence report – showing PDATA is a top 5% ICO

  • Already >1 million USD raised in the Pre-ICO (hard cap $5 million in Pre-ICO)

  • 4k+ active users providing personal data and opinions

Management Team:

  • Dr. Christian Lange (CEO): proven track record in entrepreneurship and successful exit in 2015

  • Marlene Gagesch (CTO): head of B2B software departments for > 10 years

For more information:


Can’t Miss Quick-Start Guide to Launching a New Business Venture (Influencive), Rated: A

The following quick-start guide will explain the 7 steps that you need to follow to launch your business venture.

Make Sure There Is a Market for Your Idea

The very first step you should take is to validate your idea or concept. You need to make sure that there is a market for your idea.

Create a Basic Business and Marketing Plan

If you are trying to launch your product or service as soon as possible, you will still need a solid business and marketing plan. You do not need to be completely detailed, but you should have a good plan in place.

Obtain Funding for Your Idea

Another way to get financing is to use P2P (peer to peer) lending. This is similar to crowdfunding, which is another option. With both P2P lending and crowdfunding, you will need to properly explain the value of your product or service. Also, it may take a while to obtain all the funding that you require.

Research Your Target Demographic

Once you get funding, you will need to start researching your target demographic. You need to know who you are marketing to before you start a marketing campaign.

Create a Website

You do not need to spend a lot to build a website. There are several affordable options with easy to use website builders. These website builders include drag and drop layouts, so anyone can build their own website. A few options include WordPress, Wix, and SquareSpace.

Decide on a Business Structure

The next step is to choose a business structure. This is essential and should be decided before you release your product or service.

Start Marketing Your Product or Service

The final step is to begin marketing your product or service.


In consultation with MCA, Sebi makes headway in framing crowd-funding norms (Business Standard), Rated: AAA

The Securities and Exchange Board of India (Sebi) is finalising the regulatory framework for crowd-funding in consultation with the corporate affairs ministry.


Revolut uses GPS for FX app launch in APAC (Fintech Futures), Rated: AAA

Revolut will be using Global Processing Services (GPS) for the launch of its multi-currency FX app in the APAC region.

Revolut will unleash its app, starting with New Zealand, Singapore and Japan. GPS announced the deal during the Lord Mayor of the City of London’s UK Business delegation, which is currently in Australia this week.

Middle East

Fintech Startup Beehive Is Closing The Gap For SME Finance In The GCC (Dubai Forum), Rated: AAA

She found Beehive, a Dubai-based peer-to-peer lending platform. Through Beehive, Lowmass borrowed $54,000 in late 2016 at an interest rate of 9.89%. Although it took about the same amount of time to get a loan from Beehive as it did through the bank, Lowmass says, “the funds were raised cleanly and extremely quickly and we were delighted with the resultinginterest rate we ended up paying.”

It has 6,000 registered investors—mostly from the U.A.E.—and has channeled a total of $40 million to borrowers.


Ecobank: African Fintech Predicted to Grow Exponentially by 2020 (Crowdfund Insider), Rated: A

Africa is now at the forefront of fintech with 57.6% of the world’s 174 million active registered mobile money accounts (100.1 million) in Sub-Saharan Africa. Fintech in Africa is predicted to grow from US$ 200 million to US$ 3 billion by 2020. As Ecobank works seamlessly across 36 countries in total, Ecobank is also the only bank that allows customers to transact more easily across borders.

Ecobank’s mobile app allows customers in any of the 33 African countries in which it operates to check balances, pay bills and merchants, and many other services. Rwanda, where the summit is taking place, has the second highest use of mobiles in Africa, with more than 50% of the population unique subscribers. Kenya has the highest penetration rate of almost 60% of the population.


Vested Ventures completes seed round in gamified savings app Dojo (Finextra), Rated: AAA

Vested Ventures, the investment arm of the fastest growing public relations agency globally, Vested, announced it has successfully completed a seed round investment in Vancouver financial software company Dojo Technology Corp (“Dojo”).

Dojo’s iOS and Android-friendly mobile platform reimagines how families and young people interact with their banks and credit unions by providing reward-based gamification and nudging users towards positive financial habits.


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George Popescu
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