- Today’s main news: Prosper tops 1 million loans. KBRA assigns preliminary ratings to SoFi Consumer Loan Program (2018-3) Trust. Elevate Credit earnings preview. Zopa CEO on FCA regulatory review. 60 firms apply for Hong Kong banking license.
- Today’s main analysis: Credit bureau earnings.
- Today’s thought-provoking articles: FCA to crack down on UK P2P lenders. What to expect in European fintech in the next 24 months. i2i Funding breaks away from traditional banking. Half of unlicensed P2p lenders in Indonesia are from China.
- Prosper hits 1 million loans. Congratulations.
- KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2018-3 Trust. As usual, SoFi earns an awesome rating.
- Credit bureau earnings. An interesting analysis from PeerIQ on TransUnion and Equifax earnings.
- Elevate Credit earnings preview.
- Mike Cagney opens up about affairs at SoFi.
- Investors are ready to give Cagney a second chance.
- 5 ways to earn passive income.
- 85% of small business owners are living the dream.
- ArborCrowd wants high net worth investors to understand appeal of workforce housing.
- Millennium Trust Company refreshes alternative investment platform.
- Zopa CEO on FCA regulatory review.
- Crackdown is looming for P2P lending.
- FCA proposes new regulations on P2P lending.
- Tougher P2P lending rules proposed.
- Small companies want to remain in EU.
- What P2P lenders think of FCA review.
- What to expect in fintech in the next 24 months.
- FinLeap to offer fintech-as-a-service.
- Irish startups to look at for 2018. Hint: Flender is one of them.
- Libra Credit receives investment from Binance Labs.
- Nexo to acquire SALT Lending’s qualifying assets.
- Global Debt Registry bolsters executive team.
- Hong Kong: 60 firms apply for virtual bank licenses.
- Australia: Prospa recognized as top fintech company.
- India: i2i Funding helps break away from traditional banking.
- China: P2P lending going through a cleanup process.
- Pakistan: What Imran Khan’s election means for fintech.
- Australia: Strong first half for fintech lending.
- India: How to earn money through investing.
- MENA: Thinking outside the financing box.
- Africa: Nigerians lending to Nigerians.
- Brazil: New rules for credit fintech companies.
- United States
- Marketplace Lender Prosper Tops One Million Loans (Crowdfund Insider) Rated: AAA
- KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2018-3 Trust (Business Wire) Rated: AAA
- In Second Act, a Silicon Valley CEO Opens Up About Affairs (Wall Street Journal) Rated: A
- Sex Scandal Toppled a Silicon Valley Chief. Investors Say, So What? (The New York Times) Rated: A
- Highest GDP Growth since 2014, Credit Bureau Earnings (PeerIQ), Rated: AAA
- Elevate Credit earnings preview: what Wall Street is expecting (Markets Insider) Rated: AAA
- 5 Ways to Earn a Truly Passive Income (Zing Blog) Rated: A
- 85% of Small Business Owners Say They’re Living the Dream (Small Business Trends) Rated: A
- ArborCrowd Wants HNW Investors to Understand the Appeal of Workforce Housing (National Real Estate Investor) Rated: A
- MILLENNIUM TRUST COMPANY REFRESHES ALTERNATIVE INVESTMENT PLATFORM (STL News) Rated: B
- United Kingdom
- Zopa CEO Jaidev Janardana Welcomes FCA Regulatory Review of P2P Lending (Crowdfund Insider) Rated: AAA
- Crackdown is looming for peer-to-peer lenders (The Times) Rated: AAA
- U.K. Watchdog Proposes New Regulations On Lending Platforms (PYMNTS) Rated: A
- We would remain in EU now, say small companies (The Times) Rated: A
- Tougher P2P lending rules proposed over poor practice concerns (Your Money) Rated: A
- Here’s what the industry thinks of the FCA review (Peer2Peer) Rated: A
- Hong Kong prepares to usher in virtual banks, as 60 firms apply to be pioneers in financial revolution (South China Morning Post) Rated: AAA
- China P2P Business Going Through Cleanup Process, CreditEase Says (Bloomberg) Rated: A
- European Union
- What Can FinTech Expect In The Next 24 Months In The Central And Eastern Europe (Forbes) Rated: AAA
- FinLeap moves into the fintech platform-as-a-service space (FinExtra) Rated: A
- 10 Irish startups to look out for in 2018 and beyond (EU Startups) Rated: A
- Libra Credit Receives Investment from Binance Labs (Crowdfund Insider) Rated: A
- Nexo Crypto Lending Platform Offers to Acquire SALT Lending’s Qualifying Assets (Bitcoin Exchange Guide) Rated: A
- Global Debt Registry Bolsters Executive Team To Help Transform Structured Credit Market (Payment Week) Rated: B
- Online Lender Prospa Receives Recognition as Top Fintech (Crowdfund Insider) Rated: AAA
- Strong First Half for Fintech Lending (Livewire) Rated: A
- i2i Funding Helps Break Away from Traditional Banking (The Tech Panda) Rated: AAA
- How to earn money by investing (Economic Times) Rated: A
- Economy in brief: Half of unlicensed P2P lending from China (The Jakarta Press) Rated: AAA
- What Imran Khan’s Election Win Means For Pakistani Fintech (Forbes) Rated: A
- Thinking outside the (financing) box (CPI) Rated: AAA
- Peer to peer lending: from Nigerians, to Nigerians (Stears Business) Rated: AAA
- Latin America
- New rules for credit fintech companies (Lexology) Rated: AAA
Marketplace Lender Prosper Tops One Million Loans (Crowdfund Insider) Rated: AAA
Online lender Prosper announced a new milestone yesterday. The marketplace lending platform topped one million loans this past week representing over $13 billion in originations.
In May, Prosper announced strong loan originations saying the platform experienced a 27% year-over-year increase in the first quarter to $744 million.
The net loss for Q1 decreased by $12.6 million to ($24) million but EBITDA was positive for the fourth consecutive quarter.
KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2018-3 Trust (Business Wire) Rated: AAA
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2018-3 (“SCLP 2018-3”). This is a $546.00 million consumer loan ABS transaction.
Preliminary Ratings Assigned: SoFi Consumer Loan Program 2018-3
|Class||Preliminary Rating||Class Principal|
In Second Act, a Silicon Valley CEO Opens Up About Affairs (Wall Street Journal) Rated: A
Seeking a fresh start in Silicon Valley, former Social Finance Inc. chief and co-founder Mike Cagney now admits that an affair with a subordinate was a reason for his abrupt departure last year from the firm.
Now, Mr. Cagney is adding another reason for deciding to leave a startup he led for six years. In an interview with The Wall Street Journal, he said that he had consensual sexual relationships with female subordinates, something he had previously denied publicly. He also said he had misled SoFi’s board of directors about one of the affairs.
Sex Scandal Toppled a Silicon Valley Chief. Investors Say, So What? (The New York Times) Rated: A
Yet just months after Mr. Cagney departed SoFi, two venture capitalists who had been on the company’s board and knew many details of his actions invested $17 million in his new start-up, called Figure. Since then, Mr. Cagney has raised another $41 million from others for the lending start-up, which will open soon.
Mr. Cagney’s swift comeback — from ouster to new company took four months — provides one of the starkest illustrations of the speed with which the technology industry is moving past the sexual harassment allegations that swept Silicon Valley and many other industries over the last year.
Highest GDP Growth since 2014, Credit Bureau Earnings (PeerIQ), Rated: AAA
The US economy grew at a blistering 4.1% pace, the highest GDP growth reading since 2014, driven by consumer spending. Consumer spending grew by 4%, higher than economists’ estimates. Consumer spending has been driving US economic growth and outstanding consumer debt has reached all-time highs, although consumer debt per capita is still well below its pre-crisis peak.
Credit Bureau Earnings
PeerIQ’s partner TransUnion released its 2Q earnings this week, along with Equifax. TransUnion’s earnings beat market expectations with revenue of $563 Mn, up by 19% YoY. TU’s revenue growth was driven by Online Data Services, where revenue grew by 23% YoY.
Equifax’s revenue increased by 2% YoY to $877 Mn in 2Q, while net income decreased by 12% YoY to $145 Mn. Below we compare the latest earnings of the 3 credit bureaus – TransUnion, Equifax and Experian. Note that Experian’s earnings are for the 6 months ending 3/31/18.
Elevate Credit earnings preview: what Wall Street is expecting (Markets Insider) Rated: AAA
- Elevate Credit is reporting earnings from Q2 on July 30.
- Analysts predict earnings per share of $0.073.
Elevate Credit releases earnings for the most recent quarter on July 30.
9 analysts are estimating earnings of $0.073 per share as opposed to earnings of $0.080 per share in the same quarter of the previous year.
Analysts are expecting the company to report $186.8 million, an increase of 24.13% over the prior year quarter.
5 Ways to Earn a Truly Passive Income (Zing Blog) Rated: A
In recent years, investors have started putting their money into peer-to-peer lending companies. By lending out your own money to peers in the form of personal loans, you are able to earn interest – similar to the way that banks and other lenders produce income. On sites such as Lending Club and Prosper, you can open an account and begin investing in this passive income venture.
Like all investments, the ROI varies, but Lending Club and Prosper boast an average investment return of about 5 – 10%. Both of these platforms also give opportunities for users to make their investment semiautomatic, meaning you wouldn’t need to constantly monitor your investments or reinvest returns. But there would still be some work involved. If you want this to be a completely passive income stream, Lending Club offers a PRIME account, in which you’ll have a fully managed account. You’ll need to have a minimum investment of $5,000, though, and it will be subject to a one-time .8% fee.
85% of Small Business Owners Say They’re Living the Dream (Small Business Trends) Rated: A
According to recent findings from Kabbage, a financial services and data platform, 85 percent of small business owners believe that being your own boss and owning a business is achieving the American Dream. In addition, 84 percent said they hope their children will also one day become small business owners.
The survey, which consists of responses from more than 1,000 small business owners, found that 38 percent of those who hope their children become entrepreneurs feel that way because they want them to turn their passion into a career. 24 percent appreciate that being their own boss allows them to create a flexible schedule. And 22 percent feel that building a small business is rewarding, and they want their kids to feel that sense of pride.
ArborCrowd Wants HNW Investors to Understand the Appeal of Workforce Housing (National Real Estate Investor) Rated: A
ArborCrowd targets IRRs from 12 percent to 15 percent in top-tier markets and IRRs in the mid-teens or low 20s in secondary and tertiary markets, according to Adam Kaufman, co-founder and managing director of the online crowdfunding platform.
MILLENNIUM TRUST COMPANY REFRESHES ALTERNATIVE INVESTMENT PLATFORM (STL News) Rated: B
Millennium Trust Company, LLC, (“Millennium Trust”) a leading retirement and custody services provider to advisors, financial institutions, businesses and individuals, announced today the launch of its enhanced education platform on the Millennium Alternative Investment Network (MAIN). MAIN is a free research, education and alternative investment resource to help investors and advisors increase their understanding of alternative assets, and invest through simplified and streamlined investment processes.
Zopa CEO Jaidev Janardana Welcomes FCA Regulatory Review of P2P Lending (Crowdfund Insider) Rated: AAA
This past Friday, the UK Financial Conduct Authority (FCA) finally released their reviewof the crowdfunding industry regulations. While the investment crowdfunding sector (equity crowdfunding) came away mostly unscathed the loan based sector (or peer to peer lending) took a bit of a lashing.
The FCA said the peer to peer lending had become “increasingly complex” and sited occurrences of operations that lacked transparency and instances where interest rates were not matched with the appropriate level of risk. The FCA subsequently announced a new consultation as it looks to firm up compliance for UK online lenders. Gillian Roche-Saunders, a partner at the law firm of Bates, Wells & Braithwaite – and Fintech expert, said this will be “the foundation of a much more sophisticated and targeted supervisory approach from the regulator.“
Zopa CEO Jaidev Janardana welcomed the reappraisal and added scrutiny of P2P operations calling it a positive step. Janardana said they “wholeheartedly agree” with the FCA assessment;
Crackdown is looming for peer-to-peer lenders (The Times) Rated: AAA
The City watchdog is to crack down on peer-to-peer lending and the crowdfunding industry amid fears that consumers are being exposed to risks they do not understand.
The popularity of peer-to-peer lending, where individuals or small businesses borrow from members of the public and institutions on the internet, has soared in recent years.
About 150,000 Britons have handed over nearly £10 billion in the past decade through these forums, earning an attractive average of 4.5 per cent interest.
The Financial Conduct Authority is looking to tighten up oversight over crowdfunding platforms, which provide short-term lending for small businesses and consumers, in part to make sure customers have clear information about the rules, terms and conditions.
A 156-page report by the watchdog found that some customers were subject to poor practices by certain online platforms and that they were provided with unsuitable products and poor treatment.
The reform measures have been backed by platforms like Funding Circle, a leading crowdfunding lender, as a way to gain more legitimacy as competition heats up with traditional banks. RateSetter, one of the three-largest P2P lenders in the U.K., has also sought clarity on regulations as a means to better compete against established banks.
We would remain in EU now, say small companies (The Times) Rated: A
The majority of small companies would vote to stay in the European Union if there were to be a re-run of the Brexit referendum, a survey shows.
A poll of 965 small businesses found that 56 per cent now want to stay in the EU and 32 per cent wish to leave. The remainder were undecided or declined to state their preference.
The survey, which was conducted by Funding Circle, a peer-to-peer lending platform, highlighted a 7 per cent swing towards remaining since April last year.
Tougher P2P lending rules proposed over poor practice concerns (Your Money) Rated: A
The Financial Conduct Authority (FCA) has opened a consultation on loan-based crowdfunding platforms (peer-to-peer) following its original review of the sector in 2016.
It said since then, it’s observed that the new and growing area has become increasingly complex and has found evidence of “poor business practices” that could cause actual or potential harm to investors.
For example, P2P platforms have a much more active role by taking decisions on behalf of investors, structuring the loans they’re exposed to, and splitting loans across a number of investors (lenders) in order to receive a target rate of return.
Here’s what the industry thinks of the FCA review (Peer2Peer) Rated: A
THE FINANCIAL Conduct Authority released its long-awaited review into the peer-to-peer lending sectoron Friday. Here are some of the industry reactions so far…
Rhydian Lewis, chief executive, RateSetter-“I believe peer-to-peer lending will become a part of every investor’s diversified portfolio and the proposals from the FCA do not change that belief.”
James Meekings, co-founder and UK managing director of Funding Circle-“Funding Circle has consistently campaigned for proportionate regulation that protects consumers, whilst allowing innovation to boost choice and competition in the lending and investment markets.”
Stuart Law, chief executive at Assetz Capital-“While we have just received this latest FCA consultation document, and therefore have not as yet fully digested it, we will always be supportive of any regulation that ultimately benefits our investors, borrowers and the wider peer-to-peer industry. Proposals that advocate greater transparency, appropriate investor remuneration and good corporate governance are very much welcome.”
Hong Kong prepares to usher in virtual banks, as 60 firms apply to be pioneers in financial revolution (South China Morning Post) Rated: AAA
When SagaDigits, a HK$2 million (US$254,820) start-up, wanted to add post-merger shareholders and signatories to its corporate bank account, its chief executive approached a Hong Kong bank for help.
What happened next turned into many months of back-and-forth paperwork and arguments with the lender, said the company’s chief executive officer, Arthur Chan. He even spent a month tracking down his bank relationship manager after the staff was relocated to another branch.
Good news may be at hand for him, as the Hong Kong Monetary Authority (HKMA) is poised to issue the city’s first virtual banking licence by year’s end to promote fintech and offer customers “a new kind of experience.”
China P2P Business Going Through Cleanup Process, CreditEase Says (Bloomberg) Rated: A
Ning Tang, founder and chief executive officer of CreditEase, a Chinese wealth-management firm and the majority owner of U.S.-listed peer-to-peer lending platform Yirendai, talks about China’s P2P lending industry. He speaks with Tom Mackenzie on “Bloomberg Daybreak: Asia.”
What Can FinTech Expect In The Next 24 Months In The Central And Eastern Europe (Forbes) Rated: AAA
Trend #1: Further development of payment and money transfer solutions. As described in more detail in a previous Forbes post, FinTech incumbents started historically with niches that were on the one hand abandoned by traditional banks and, on the other hand, not as strictly regulated. That is why there has been more transaction service providers originating in the region, compared to different types of FinTech companies.
Trend #2: Business-to-business. Retail banking requires relatively more effort and brings in lower returns in exchange than servicing Small and Medium Enterprises (SME’s), not to mention large enterprises, which has been one of the remaining strongholds for banks (aside from trading, mortgages and services for corporations). Therefore, FinTech startups began offering their products to individuals but are slowly entering the corporate sector.
One of the examples is Transferwise. This provider allows money to be sent with a small fee and actual mid-market rate, avoiding high spreads.
Trend #3: Growth in complexity. From single service providers with excellent client experience, FinTech incumbents have evolved into mature companies with the high tech background.
Teambrella’s venture concept of Ethereum-enabled peer-to-peer insurance is an example of the complexity of contemporary FinTechs. Instead of providing insurance itself, the platform enables its users to create “insurance teams” that have control over the entire process, from admission to decision-making over reimbursement amount. The company claims that its concept solves problems arising in the insurance industry and increases transparency.
Trend #4: Blockchain.
FinLeap moves into the fintech platform-as-a-service space (FinExtra) Rated: A
Berlin-based fintech factory FinLeap is positioning as a provider of bundled solutions for startups and banks, melding stand-alone products across a common platform.
10 Irish startups to look out for in 2018 and beyond (EU Startups) Rated: A
This week we took a closer look at the Irish startup scene with the goal to introduce you to some of the most promising startups from there. Below you’ll find 10 Irish startups to look out for in 2018 and beyond.
Flender: Successfully funded through the Seedrs equity crowdfunding platform, Dublin’s Flender is a peer-to-peer (P2P) lending platform for businesses and consumers to borrow and lend money through their existing networks. Flender was launched in early 2017, offering a combination of social network, low-interest rates and an excellent mobile experience. They have so far raised €2 million from investors to formalise the social lending market among friends, family and business connections.
Libra Credit Receives Investment from Binance Labs (Crowdfund Insider) Rated: A
Libra Credit, an online lender in the cryptocurrency space, has received an investment from Binance Labs – the tech incubator and VC portion of Binance – one of the largest cryptocurrency exchanges in the world.
According to a post on Medium, the agreement enables BNB holders to receive loans collateralized by the crypto. So Libra Credit will lend fiat and digital assets to users who pledge BNB.
Nexo Crypto Lending Platform Offers to Acquire SALT Lending’s Qualifying Assets (Bitcoin Exchange Guide) Rated: A
Known for being the first-ever instant, cryptocurrency-backed loans provider, Nexo took to Twitter to express its offering to acquire what remains of SALT Lending, a membership-based lending and borrowing network and a worthwhile competitor.
The tweet made on July 27, 2018, made it seem as if the Nexo was doing a favor or “lends a helping hand” to its competition, while sharing its willingness to “provide instant liquidity to its community, up to $2,000,000 per client without “proof-of-access” requirements.” To add to this public announcement, the firm also shared what appears to be its letter of intent to SALT Lending.
Global Debt Registry Bolsters Executive Team To Help Transform Structured Credit Market (Payment Week) Rated: B
Global Debt Registry (“GDR”), today announced two new executive hires from the banking industry. Evan Psaropoulos, formerly of Credit Suisse, has joined GDR as CFO, and Patrick Dietz, formerly of BNY Mellon, has joined the organization as Product Director. This follows Charlie Moore assuming the role of Chief Executive Officer, in addition to President, in recognition of his leadership and vision.
In his role as CFO, Evan will oversee the finance function within GDR, including overseeing equity financing and commercial strategy. He will lead investor relations for GDR across the capital markets space leveraging his investment banking and corporate development experience.
Online Lender Prospa Receives Recognition as Top Fintech (Crowdfund Insider) Rated: AAA
The Mortgage & Finance Association of Australia or “MFAA” is the national body representing finance brokers, mortgage managers, lenders, aggregator/broking groups and other industry participants, in the mortgage and finance industry in Australia.
The MFA also recognised Prospa’s Roberto Sanz as the National Winner of Business Development Manager in the Lender and Support Service Provider category for 2018.
Strong First Half for Fintech Lending (Livewire) Rated: A
It has been a very active half year in the Australian Alternative Finance (AltFi) market. Since my previous wire on the key themes expected for 2018, the market has continued to grow and evolve. The themes were: 1) Continued Growth, 2) Consolidation of Lenders; and 3) Transparency via Listings.
These themes have been present in the first half, however we have seen two other themes present that will accelerate the development of the Australian Fintech lending market. One being the participation of banks in funding the AltFi lenders, the other, Government support for SME lending.
i2i Funding Helps Break Away from Traditional Banking (The Tech Panda) Rated: AAA
The Peer to Peer or P2P lending market has doubled in China. Though it might be at a nascent stage in India, according to co-founder of P2P lending platform i2i Funding Raghavendra Pratap Singh, it has a lot of potential. In a chat with The Tech Panda, Singh explained the intricate process and i2i Funding’s plans for the future.
I2i Funding had started with loan amounts of INR 10-15 lakhs per month, and now are doing INR 1.5 crore. Currently, they have around 30,000 registrations for borrowers and around 4000 for investors. They add around 200-300 new investors per month. So far, the company has disbursed over 500 loans of over INR 8 crores.
How to earn money by investing (Economic Times) Rated: A
Many individuals still consider keeping money in their bank savings accounts akin to investing. Yes, it earns an interest rate but over a longer period of time, the earnings heavily fall short of negating the impact of inflation.
Currently, most banks offer 4 percent or even lower return on their savings accounts. It, therefore, becomes important to look out for other better alternatives and investment options to make your money earn you money.
Economy in brief: Half of unlicensed P2P lending from China (The Jakarta Press) Rated: AAA
The Financial Services Authority (OJK) has discovered that more than 100 unlicensed peer-to-peer (P2P) lending providers in the country had been developed by Chinese firms.
The OJK reported its findings on Friday, pointing out that out of 227 unlicensed P2P lenders it had listed, at least half originated from China.
What Imran Khan’s Election Win Means For Pakistani Fintech (Forbes) Rated: A
Imran Khan has claimed victory in the 2018 Pakistani election for his PTI party after a campaign that has been marred by violence and allegations of vote rigging. Although Khan’s party is expected to fall short of an overall majority and would have to form a coalition, his economic policies have been questioned.
As per his 100 Day Agenda with an aim of revitalizing economic growth, Khan promised to revive manufacturing and facilitate rapid growth of the SME sector. Expanding on this, it states that the party intends on announcing “an immediate support package of reduced taxes, bring energy prices in alignment with regional competitors, clear the backlog of refunds/rebates”.
Thinking outside the (financing) box (CPI) Rated: AAA
Can you describe the development of peer-to-peer lending in MENA?
Marketplace lending is still a relatively new phenomenon in the MENA region. A big part of what we do is to educate investors in the potential for diversifying their existing portfolios with a different type of investment. It offers them a wide-range of choice as investors are able to browse through campaigns and select the ones that match their criteria best.
Liwwa only lends to small and medium enterprises (SMEs), and we continue to scale up that lending activity. As our underwriting activity grew from $2.3 million in 2016 to $5.2 million in 2017, the level of funding from retail investors nearly doubled. Retail lenders want to see a credible company, a solid portfolio and a low default rate. As long as Liwwa continues to deliver on those three criteria, we can build trust in the platform and hopefully build an ongoing relationship with new and existing investors.
Over the last 18 months banks have significantly scaled back lending activity to the SME sector. How as this affected P2P lending activity in the region?
IFRS 9, with its provisioning rules, is one of the main drivers of banks’ reticence to lend to SMEs. The market demand for loans hasn’t appreciably changed, and one could argue that market risk has stabilised in many MENA economies—so the accounting rule change is having an outsized impact. Alternative financing structures such as these are poised to fill a need because much of the debt is treated on an off-balance sheet basis. Retail lenders and non-bank institutions can contribute to filling the SME lending gap given a difference in risk appetites and a more generous perspective on solvency ratios.
Peer to peer lending: from Nigerians, to Nigerians (Stears Business) Rated: AAA
When societies were small and closed-off, people lent freely among themselves based on trust. At worst, the lender believed that he could take up his case with the local community. But as globalisation and technology came, people began to migrate, and personal lending became inefficient. The solution? Banks.
At the centre of this story is FINT, a Nigerian online peer-to-peer lender founded in early 2017. The idea is simple. Emeka signs up to the FINT platform and requests for a loan. Chinyere signs up, funds her account, and chooses which loan(s) she wants to finance from a pool of anonymous borrowers. In its simplest form, Emeka wants ₦120,000 for six months, and Chinyere lends it to him and gets monthly payments of the principal (₦120,000) and interest (e.g. 10%) every month – or ₦13,200 each month.
FINT has been pioneering this simple form of lending in Nigeria. Its aim to “empower Nigerians by making loans more accessible and affordable; and lending more rewarding” speaks to the core idea of peer-to-peer lending.
New rules for credit fintech companies (Lexology) Rated: AAA
The Central Bank also issued Circular 3,898 in May 2018, which set out the procedural rules for establishing such entities.
The Central Bank has introduced these rules in order to continue the modernisation of Brazil’s financial sector – something which has been ongoing since 2013, with more intensive actions being taken since 2016. The main goals of the rules are to:
- incentivise innovation;
- increase legal certainty;
- enable the entrance of new players in the market;
- increase competition; and
- reduce interest rates.