- Today’s main news: PeerStreet funds $1B in loans. Elevate Credit celebrates 2M non-prime customers. Assetz Capital raises rates. Australian government lends $700K to HashChing. Plaid expands into Canada.
- Today’s main analysis: Fintech gave brick-and-mortar SBA lender an edge.
- Today’s thought-provoking articles: How much mortgage borrowers can save by shopping around. Competition is pushing banks to change strategies. Millennials dominate European P2P lending. Chinese lenders scope out India.
- PeerStreet lends $1 billion. AT: “Congratulations. Great milestone.”
- Elevate Credit sees its 2 millionth non-prime customer. AT: “No surprise here. As long as Americans continue to fall in their credit ratings, this number should get higher. Of course, this number also represents UK consumers.”
- Mortgage shoppers can save the most ever by shopping around. AT: “I do wonder sometimes how much of LendingTree’s reports are overly reliant on their own data. That’s not to devalue the information, however.”
- SBA lender gains an edge with SmallBiz Loans partnership. AT: “A great case study on how fintech-bank partnerships can benefit both parties.”
- Lenders ramp up competition.
- Why GreenSky’s IPO is one of the most anticipated.
- OCC tells banks they can compete with payday lenders.
- Pew says “good job” to OCC.
- Americans prioritize phone payments over car loans.
- Small businesses more satisfied with fintech lenders.
- Radius Bank opens up rewards program.
- Loeb wants to raise $400 million for fintech acquisitions.
- CREXi raises $11 million for commercial real estate.
- American banks have most profitable quarter ever.
- NEA welcomes new partner.
- Trelix adds closing services solution to Mortgage fulfillment suite.
- Assetz Capital raises rates.
- New SME funding platform launches.
- Manchester can be global leader in fintech.
- Millennials dominate P2P lending.
- Startup in Sweden raises 10 MSEK for banks to reach millennial home buyers.
- Competition pushes banks to change strategies. AT: “Good job, lenders.”
- Interview with Celsius CEO.
- International Digital Asset Program offers P2P lending.
- United States
- PeerStreet Funds One Billion in Loans (Business Wire) Rated: AAA
- Elevate Credit Celebrates Its 2 Millionth Non-Prime Customer (Citizens Tribute) Rated: AAA
- Mortgage Borrowers Could Save the Most Ever by Shopping Around (Lending Tree) Rated: AAA
- Lenders are ramping up competition as spring season heats up (MPA Magazine) Rated: A
- Here’s why GreenSky is one of the year’s most-anticipated fintech IPOs (Proactive Investors) Rated: A
- OCC gives banks green light to compete with payday lenders (American Banker) Rated: A
- Pew Commends OCC for Encouraging Banks to Provide Installment Loans (PR Newswire) Rated: A
- Americans Are Prioritizing Phone Payments Over Car Loans (Bloomberg) Rated: A
- Small businesses becoming more satisfied with fintech lenders (American Banker) Rated: A
- Radius Bank Debuts Rewards Program with Enhanced Benefits For Loyal Customers (Crowdfund Insider) Rated: A
- Loeb Seeks to Raise $ 400 Million for New Blank-Check Company (Bloomberg) Rated: A
- How fintech gave this SBA lender an edge (American Banker) Rated: AAA
- CREXi raises $ 11 million to bring commercial real estate out of the Dark Ages (Tech Crunch) Rated: A
- American banks had their most profitable quarter ever (CNN) Rated: A
- NEA Welcomes Jonathan Golden as Partner; Announces Several New Hires (Pilot Online) Rated: B
- Trelix Now Provides End-to-End Mortgage Fulfillment with the Addition of its Closing Services Solution (Altisource) Rated: B
- United Kingdom
- Assetz Capital Announces Its First Ever Rate Increase Across Access Accounts (Crowdfund Insider) Rated: AAA
- New SME funding platform launches (Peer2Peer Finance) Rated: A
- “Manchester Can Be A Global Leader In Fintech” Say Policymakers (Business Up North) Rated: B
- European Union
- Millennials dominate European P2P lending (Peer2Peer Finance) Rated: AAA
- A Swedish startup has raised 10 MSEK to help Nordic banks attract millennial house buyers (Business Insider) Rated: A
- Fintech competition is pushing banks to change strategies (Business Insider) Rated: AAA
- Exclusive Interview with Alex Mashinsky, Celsius CEO and VoIP Innovator (Crypto Globe) Rated: A
- International Digital Asset Platform (IDAP Token): Crypto Derivatives? (Bitcoin Coin Exchange) Rated: B
- Australian Government Backs Fintech HashChing with $ 700,000 Loan from Jobs NSW (Crowdfund Insider) Rated: AAA
- How Zerodha is reinventing the rules of lending with an age-old product (Your Story) Rated: AAA
- Chinese lenders out for a taste of India (The Economic Times) Rated: AAA
- P2P lending feared to trigger black credit (News Vietnam Net) Rated: AAA
- Dead fintechs don’t wear Plaid (Fintech Futures) Rated: AAA
PeerStreet Funds One Billion in Loans (Business Wire) Rated: AAA
PeerStreet, an award-winning platform for investing in real estate backed loans, today announced that one billion in loans have been funded through its marketplace since launch. This announcement comes after the company announced the close of its $30 million Series B last month.
Elevate Credit Celebrates Its 2 Millionth Non-Prime Customer (Citizens Tribute) Rated: AAA
Elevate Credit, Inc. (NYSE: ELVT) (“Elevate” or the “Company”) today announced it has served more than two million non-prime customers in the US and UK, saving them more than $3 billion versus the cost of payday loans. Elevate’s three products, RISE, Elastic and Sunny, employ advanced data and analytics to provide safe access to small-dollar credit to the two-thirds of Americans who cannot get personal unsecured loans from their banks.
Mortgage Borrowers Could Save the Most Ever by Shopping Around (Lending Tree) Rated: AAA
We calculate the Mortgage Rate Competition Index weekly as the median spread between the lowest and highest APR offered by lenders in our marketplace.
- Across all purchase loan applications on LendingTree for the week ending May 13, 2018, the index was 0.66, up 0.03 from the previous week.
- How big of a deal is it to get a mortgage rate that’s 0.66% lower than the competition? Over 30 years, that could translate to $30,617 in savings on a $300,000 loan —over 10% of the total loan amount (see Mortgage Savings Tracker graphic below).
Lenders are ramping up competition as spring season heats up (MPA Magazine) Rated: A
The spread between the lowest median APR offered by mortgage lenders and the highest rate increased last week.
That’s according to the LendingTree Mortgage Rate Competition Index which analyzes rates offered by lenders on its platform. The spread for purchase loans increased from 0.23 a year ago to 0.66 last week and was up 0.03 from a week earlier.
For refinances the spread was 0.71, up from 0.67 a week earlier.
Here’s why GreenSky is one of the year’s most-anticipated fintech IPOs (Proactive Investors) Rated: A
The financial technology company plans to issue more than 34 million shares priced between US$21 and US$23. It’s scheduled to price the shares after the market close Thursday. At the midpoint price, GreenSky may raise as much as US$748mln.
The fintech has received US$560mln in funding from big-name investment firms such as PIMCO, TPG, Iconiq Capital and Fifth Third Bank.
OCC gives banks green light to compete with payday lenders (American Banker) Rated: A
The Office of the Comptroller of the Currency is shaking up the world of short-term lending by encouraging banks to offer high-interest rate loans to subprime borrowers as an alternative to payday lenders.
In a major break from past regulators, Comptroller Joseph Otting said Wednesday that he wants banks to originate loans of $300 to $5,000 to borrowers with FICO scores of 680 or below, with few other parameters beyond “sound underwriting.” The new OCC guidelines could open a $90 billion market to financial institutions.
Pew Commends OCC for Encouraging Banks to Provide Installment Loans (PR Newswire) Rated: A
The Pew Charitable Trusts today praised the Office of the Comptroller of the Currency (OCC) for formally encouraging banks to offer their customers safe, affordable small-dollar installment loans.
Millions of American adults, many of whom are low income and have damaged credit, spend more than $30 billion a year to borrow small amounts of money from payday and other high-cost lenders that operate outside the banking system. Pew research indicates that, given the opportunity, 8 in 10 payday loan borrowers would prefer to get credit from their banks or credit unions.
Americans Are Prioritizing Phone Payments Over Car Loans (Bloomberg) Rated: A
U.S. consumers are more devoted to their mobile phones than their automobiles.
The sea change has taken place over the last few years as mobile devices become an integral tool not just for communication with loved ones or employers, but also everything from banking to dating to watching TV and listening to music. As cars grow relatively less important, borrowers struggling to pay back their loans on time are increasingly prioritizing payments on the latest iPhone instead of making sure they hold on to their pickup or coupe.
Small businesses becoming more satisfied with fintech lenders (American Banker) Rated: A
Small-business owners are becoming increasingly satisfied with online lenders largely because they will often make loans that most banks won’t.
That was a key takeaway from an annual survey of small-business credit trends released Tuesday by the 12 Federal Reserve banks.
While small-business borrowers are generally more satisfied with banks — their rates are substantially lower — the survey found that the gap is narrowing.
Radius Bank Debuts Rewards Program with Enhanced Benefits For Loyal Customers (Crowdfund Insider) Rated: A
Radius Bank, a virtual bank focused on providing clients with banking solutions to better financial health, announced on Tuesday the launch of its new rewards program that offers enhanced benefits, such as increased transaction limits and cash back opportunities, for loyal customers.
According to Radius Bank, the rewards program is tiered into three levels based on criteria such as personal deposit balance and the longevity of the relationship clients have had with the Bank.
Loeb Seeks to Raise $ 400 Million for New Blank-Check Company (Bloomberg) Rated: A
Activist investor Dan Loeb is seeking to raise as much as $400 million to acquire financial technology firms via a so-called blank-check company.
The firm, Far Point Acquisition Corp., will be led by Tom Farley, who stepped down Monday as president of the New York Stock Exchange. Credit Suisse Group AG and Bank of America Corp. are leading the share sale, according to a regulatory filing Tuesday.
Far Point intends to issue 40 million units at $10 apiece under the terms of the offering. Each unit consists of one Class A share and one-third of one redeemable warrant.
How fintech gave this SBA lender an edge (American Banker) Rated: AAA
Add Seacoast Banking in Stuart, Fla., to the list of community banks that now believe in working with fintechs.
Seacoast, which became a SmartBiz client late last year, booked $700,000 of gains from selling SBA loans in the first quarter, tripling what it reported a quarter earlier and surpassing its total for all of 2017 by 40%.
Kleffel, who said loans generated through SmartBiz hit 127% of targeted volume in the first quarter, predicted that the effort should allow Seacoast to become one of the SBA’s top 100 7(a) lenders for the fiscal year that ends on Sept. 30. To do so, Seacoast would likely have to increase year-over-year 7(a) originations by more than 60%, according to SBA data.
CREXi raises $ 11 million to bring commercial real estate out of the Dark Ages (Tech Crunch) Rated: A
CREXi — the CRE stands for “commercial real estate” — has been around since 2015, but recently announced an $11 million Series A as well as some interesting user numbers. Key investors include Jackson Square Ventures, Manifest Investment Partners, Lerer Hippeau, Freestyle Capital, TenOneTen Ventures and Founder Collective. The company has managed more than 100,000 “properties brought to market” on its platform and they have 200,000 users per month. They see more than 6,000 properties listed on the site each month.
American banks had their most profitable quarter ever (CNN) Rated: A
Bank profits soared by 28% during the first three months of 2018 to $56 billion, according to statistics published by the FDIC on Tuesday.
The stellar results were released hours before the House of Representatives is expected to pass legislation that would roll back some rules on community banks and regional lenders designed to prevent another financial crisis.
NEA Welcomes Jonathan Golden as Partner; Announces Several New Hires (Pilot Online) Rated: B
New Enterprise Associates, Inc. (NEA) today announced that Jonathan Golden has joined the firm as Partner. Golden, an experienced technology investor and the first product manager at Airbnb, will be based in the firm’s Menlo Park, Ca., and San Francisco offices. The firm also named Matthew McAviney, M.D., Tak Cheung, M.D., and Santhosh Palani, Ph.D., as Principals on the healthcare team.
As an active angel investor, Golden has backed numerous early-stage companies including Bowery Farming, Coinbase, Everlane, Funding Circle, and Tile, among others.
Trelix Now Provides End-to-End Mortgage Fulfillment with the Addition of its Closing Services Solution (Altisource) Rated: B
Trelix quality control and other due diligence products and services across the loan origination and securitization lifecycle, today announced the launch of its closing services solution that helps mortgage lenders efficiently and properly execute and settle their loans. With the addition of closing services, Trelix now provides a full suite of end-to-end fulfillment services for its customers.
Assetz Capital Announces Its First Ever Rate Increase Across Access Accounts (Crowdfund Insider) Rated: AAA
UK-based peer-to-peer lending platform Assetz Capital announced last week its first ever rate rise across its access accounts. The online lender reported that the rate increase, which takes effect from 1st May 2018 until further notice, will take target interest rates for the Quick Access Account and 30-Day Access Account from 3.75% to 4.10% and from 4.25% to 5.10%. Assetz Capital also revealed both new and existing investors will benefit from the target interest rate boost, and it applies to both ISA-wrapped and non-ISA accounts.
New SME funding platform launches (Peer2Peer Finance) Rated: A
A NEW funding platform is aiming to make it easier for small- and medium-sized (SME) businesses to access loans, equity and grants.
The online platform has been created by Swoop, which is a rebrand of BizFly.
The firm says it holds a database of over 400 lenders.
P2P lenders accessible via the platform include Funding Circle, Zopa, Growth Street, RateSetter and MarketInvoice.
“Manchester Can Be A Global Leader In Fintech” Say Policymakers (Business Up North) Rated: B
Further evidence of the optimism and ambition of the event comes from the business deals and opportunities that are created among this group of people. For example, Dan Rajkumar, chief executive of White Label Crowdfunding and Rebuildingsociety, and co-founder of the event, has announced the win of a new customer, AGPeer, which is launching a new peer-to-peer lending platform targeted at the agriculture sector.
Millennials dominate European P2P lending (Peer2Peer Finance) Rated: AAA
MORE THAN half of all European peer-to-peer lenders are millennials, new research has found.
Data from European P2P loans platform Robo.cash has shown that the younger demographic is steadily taking over the leading position from the older generation of investors.
Over the past six months, Robo.cash has noticed that its share of investors aged between 22 and 37 has grown to 53.9 per cent.
A Swedish startup has raised 10 MSEK to help Nordic banks attract millennial house buyers (Business Insider) Rated: A
Headed by Klarna veteran Pär Isaksson, the startup offers established banks – not exactly known for their innovative zeal – a one-stop-shop for streamlining their mortgage lending online, from user interface to operations.
The service is planned for launch in Sweden this fall, to be followed by the rest of the Nordics during 2019. To execute on that, the company is now raising 10 million Swedish krona ($1,2 m) from a number of profiles in Swedish finance, including Swedbank’s former CFO Göran Bronner.
Fintech competition is pushing banks to change strategies (Business Insider) Rated: AAA
It has become apparent that the space is evolving in a way that will see new technologies have an outsized impact in the next few years, according to a reportfrom Temenos and The Economist Intelligence Unit. Additionally, the report examined the impact of open banking and how banks are shifting their business models, among other things.
Here are some of the key takeaways from the report:
- Tech and digitization will have a bigger impact than regulation. Forty-eight percent of banking executives think new technologies, such as blockchain and AI, will have the biggest impact on retail banks through 2020, while only 43% are most worried about regulatory fines.
- Though open banking initiatives are the center of many recent stories, only 13% of respondents think those initiatives will have the biggest impact on retail banks.
- In terms of evolving their business models, 61% of banks want to develop niche propositions for their own customers, followed by 54% wanting to maintain their own products and become an aggregator of third party-products, and 53% opting to open their services to third-party developers.
Access the report here.
Exclusive Interview with Alex Mashinsky, Celsius CEO and VoIP Innovator (Crypto Globe) Rated: A
During the recent Milken Institute conference debate, Alex Mashinsky really stood out as a harsh critic of the traditional banking system, and a strong believer in the future of cryptocurrency. He recently had the ICO for his crypto lending platform Celsius Network, but his involvement in the tech world dates a few decades back. In the 1990s, when Alex invented VoIP (Voice over Internet Protocol), he strongly believed that internet calls through a decentralized protocol could disrupt the business model of phone companies. It is now used by over a billion peopleacross the globe.
Vlad: About that, just a few weeks ago I was thinking that cryptocurrency could replace all the functions of a bank except for that of lending money to other parties. I guess it’s so much easier to follow tradition and go to the bank to get a loan each time you need a large amount of money. But then I saw you debating at the Milken Institute Conference. I found out about Celsius and was amazed that someone found a solution around it. So can you tell me how these crypto loans work?
Alex Mashinsky: They work exactly the same way as in the case of banks. There’s no magic involved, we’ve implemented a cryptocurrency-driven system which follows the same principles you find in a bank, only that you can deposit or lend funds in ways that are more stimulating from a financial perspective. We are fairer, more transparent, and operate on the blockchain.
International Digital Asset Platform (IDAP Token): Crypto Derivatives? (Bitcoin Coin Exchange) Rated: B
The Idap.io, which is a shorter name for the International Digital Asset Platform, has been planning to transform the cryptocurrency market with its new projects and ideas.
What Is International Digital Asset Platform?
This platform is a derivatives instrument that lets you access assets of the market by clicking. It has many tools that you will help you to find the best investments that you can make in the market and discover why you should make them.
You will be able to access crypto pairs, swaps, ICO venture funds and even P2P lending via this new platform.
Australian Government Backs Fintech HashChing with $ 700,000 Loan from Jobs NSW (Crowdfund Insider) Rated: AAA
HashChing, a Sydney-based home loan marketplace, has just announced a $700,000 loan from Jobs NSW. Deputy Premier and Minister for Small Business John Barilaro said the NSW Government had backed the Fintech which is expected to create 46 jobs over the next five years.
How Zerodha is reinventing the rules of lending with an age-old product (Your Story) Rated: AAA
The country’s third-largest brokerage Zerodha has received a lending licence from the RBI, and is now gearing up to launch operations by June end.
Loan against a security, be it a movable or immovable asset, is an age-old practice. While banks have traditionally occupied the largest piece of the lending pie in this space, there are others like non-banking finance companies that are also establishing themselves.
Loans against shares have been a popular product in the retail category, but of late, these loans seen some degrowth. Clocking a growth rate of 21.5 percent in FY2015, the growth of loans against shares grew by 16.5 percent in FY2017, according to the RBI Bulletin.
Chinese lenders out for a taste of India (The Economic Times) Rated: AAA
Several digital lending startups have been receiving a unique set of visitors in recent months: Chinese lending companies looking to set shop in the country. At least half a dozen Chinese financial-technology companies have held multiple meetings with the founders of digital lending startups in India for investment as well as partnership opportunities, according to domestic entrepreneurs involved in those discussions.
Chinese lenders facing regulatory heat in China due to
1 Restriction in lending rates
2 No fresh licences being given out to lending startups
3 Credit bubble causing ballooning NPAs
Sectors the Chinese could be interested in
1 Consumer lending
2 Instant personal loans
3 Peer-to-peer lending
Late last year, Chinese regulators cracked down on the micro-lending space, tightening lending rates to 36% annualised and withholding new licences for online lending startups.
P2P lending feared to trigger black credit (News Vietnam Net) Rated: AAA
After registering to borrow money on Tima.vn, a reporter, who acted as a borrower, was told to send some necessary documents via Zalo or Facebook. He was informed that he would have to pay the interest rate of 18 percent per annum to the company, not including the consultancy fee.
The reporter, when contacting vaymuon.vn, was told that he would have to pay the interest rate of 1.5 percent per month, plus the fee of VND2,000 a day for every VND1 million worth of loan, and the interest rate and fee may change at different moments.
The borrower was also warned that if he cannot pay debts, the lenders will be able to take necessary measures to collect debts – making public about the debt, selling the debt to third parties or suing before the civil court.
Dead fintechs don’t wear Plaid (Fintech Futures) Rated: AAA
San Francisco-based fintech app provider Plaid is expanding to Canada as its first international market.