- Today’s main news: Upgrade completes $282M securitization. KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2018-4 Trust. Funding Circle backs Just a Card. Monzo raises 85M GBP. Lendix changes name to October.
- Today’s main analysis: Which cities are spending within their means?
- Today’s thought-provoking articles: Total student loan balances by age group. Which cities are spending within their means? Why Kevin Zhang is bullish on Chinese P2P lending. The 25 most innovative fintechs.
- Upgrade completes $282 million securitization. Upgrade has now joined an elite club of marketplace lenders.
- KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2018-4 Trust. As to be expected, the ratings are quite positive.
- Total student loan balances by age group. Excellent chart, with some additional news on exactly how much SoFi ads mislead.
- Which cities do well in spending within their means. Another LendingTree study.
- New study shows entrepreneurs need more mentoring.
- Popular Bank’s bid to streamline small business lending.
- Judge tosses RICO claims againt Montel Williams and payday lending website.
- What challenger banks get about small businesses that banks don’t.
- Even Financial acquires Birch Finance.
- Cred adds to global leadership team.
- Factual Data integrates with LendingPad.
- White Oak Commercial Finance hires new talent.
- Funding Circle backs Just A Card.
- Monzo raises $85 million GBP at 1 billion GBP pre-money valuation.
- iwoca connects to UK bank via open banking.
- P2P lending platforms reassure investors.
- OakNorth says artificial intelligence can fuel banks’ return to small business lending.
- The top 25 most innovative fintech startups. This is quite a list, with quite a few in the alternative lending space.
- BlockFi expands crypto lending services.
- Europe: Lendix changes name to October.
- China: X Financial’s Keven Zhang is bullish on P2P.
- Ireland: Property Bridges seeks investments as low as 500 euro.
- Australia: RateSetter puts $100 million AUS into home battery scheme.
- Singapore: Opportunity and risk in fintech.
- India: How do P2P lenders handle defaults?
- Australia: Xinja hires Brett King as advisor.
- India: Pramod Akhramka elected president of NBFC P2P lending association.
- United States
- Upgrade, Inc. Completes $ 282 Million Securitization (PR Newswire) Rated: A
- KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2018-4 Trust (Business Wire) Rated: AAA
- This company advertised student loan savings of more than $ 20,000. That promise was misleading (CNBC) Rated: AAA
- Spending Within Their Means: Some Cities Do It Better Than Others (PR Newswire) Rated: AAA
- New Study Reveals Entrepreneurs Need More Mentoring (Forbes) Rated: A
- Popular Bank’s bid to streamline small-business lending (American Banker) Rated: A
- Judge tosses RICO claims against Montel Williams, payday loan site (Reuters) Rated: A
- What challenger banks get about small businesses that banks don’t (American Banker) Rated: A
- Even Financial acquires Birch Finance, a credit card rewards startup (Tech Crunch) Rated: B
- Cred Adds PayPal, Goldman Sachs, Tradeshift Executives to Global Leadership Team (Business Wire) Rated: B
- Factual Data Announces Integration with LendingPad (Business Wire) Rated: B
- White Oak Commercial Finance Hires New Talent to Meet Growing Client Demand (AP News) Rated: B
- United Kingdom
- Funding Circle backs independent alternative to Black Friday (Peer2Peer Finance News) Rated: AAA
- Monzo, the UK challenger bank, raises £85M Series E at a £1B pre-money valuation (Tech Crunch) Rated: AAA
- iwoca becomes first business lender to connect to UK bank via Open Banking (Fintech Finance) Rated: A
- P2P platforms reassure investors over risks of borrower litigation (Peer2Peer Finance) Rated: A
- OakNorth: How AI Can Fuel Banks’ Return To SMB Lending (PYMNTS) Rated: A
- X Financial’s Kevin Zhang Is Long-Term Bullish For China’s P2P Sector (China Money Network) Rated: AAA
- European Union
- European Marketplace Lender Lendix Changes its Name to October (Crowdfund Insider) Rated: AAA
- New peer-to-peer property lending platform seeking investments as low as €500 (RTE) Rated: A
- These are the 25 most innovative FinTech startups in the world, according to KPMG (Business Insider) Rated: AAA
- BlockFi Blockchain Crypto Lending Platform Expands Services to the International Stage (Bitcoin Exchange Guide) Rated: A
- Peer-to-peer lending group puts in AU$ 100m funding for South Australia home battery scheme (Energy Storage News) Rated: AAA
- Australian neo-bank Xinja hires Brett King as Advisor (FinExtra) Rated: A
- How do P2P companies handle defaults? (The Economic Times) Rated: AAA
- Pramod Akhramka elected President of the association of NBFC P2P Platforms (News Barons) Rated: B
- New tech and FinTech: opportunity and risk in Singapore case study (The Nation) Rated: AAA
Upgrade, Inc. Completes $ 282 Million Securitization (PR Newswire) Rated: A
Upgrade, Inc., a consumer credit platform that offers affordable personal loans and personal credit lines with credit monitoring and education tools that help consumers better understand their credit, announced today it closed its inaugural securitization of personal loans. Upgrade Receivables Trust 2018-1 (“UPGR 2018-1”) issued approximately $282 million in notes to nearly 20 banks and asset managers.
This transaction marks the inauguration of Upgrade’s securitization program, designed as a quarterly issuance program. Credit Suisse and Jefferies acted as joint lead underwriters, and Upgrade served as sponsor, servicer and administrator for the transaction.
KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2018-4 Trust (Business Wire) Rated: AAA
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2018-4 (“SCLP 2018-4”). This is a $549.00 million consumer loan ABS transaction.
Initial credit enhancement levels are 37.29% for the Class A Notes, 29.29% for the Class B Notes. 17.96% for the Class C Notes and 8.96% for the Class D Notes. Credit enhancement consists of overcollateralization, subordination (in the case of the Class A Notes, Class B Notes and Class C Notes), excess spread and a reserve account funded at closing.
This company advertised student loan savings of more than $ 20,000. That promise was misleading (CNBC) Rated: AAA
SoFi’s ads boasted that its products led to people saving more than $20,000 on average. But, in its calculations, the company excluded student loan borrowers for whom refinancing resulted in a longer, and sometimes more expensive, repayment timeline than they had held prior, according to the FTC.
Spending Within Their Means: Some Cities Do It Better Than Others (PR Newswire) Rated: AAA
To determine where people can afford their financial obligations, LendingTree analysts combed through anonymized credit report data of My LendingTree users from August 2018 and compared it to the average household income from the latest U.S. Census Bureau data. The ranking of the 50 largest metro areas factored in data such as the number of credit inquiries from the past two years, the use of revolving credit lines, non-housing debt and mortgage balances.
- It may come as a surprise, but some of the most expensive U.S. cities have residents living within their budgets, suggesting that higher education and greater income may be the most salient factors for living within your means.
- San Jose, Calif. (Silicon Valley), San Francisco and Raleigh, N.C., top the list for cities in which people are living within their means. High incomes help residents of San Jose and San Francisco pay their bills (despite exceptionally high housing costs), while a modest mortgage-to-income ratio gives Raleigh a big boost.
- Residents of San Antonio, Riverside, Calif., and Las Vegas are struggling to meet their bills. Previous studies have shown that people spend a lot on vehicles in San Antonio, incomes are very low in Riverside and unemployment runs high in Las Vegas.
New Study Reveals Entrepreneurs Need More Mentoring (Forbes) Rated: A
It is common wisdom that behind every great leader is a suite of great mentors and advisors. Steve Jobs had Ed Woolard and John Sculley, Bill Gates considers Warren Buffet a mentor, and Bob Iger credits his former boss Tom Murphy not only with his success at Walt Disney, but also for having inspired the mentorship program Iger introduced that pairs top Disney executives with leading tech start-up CEOs. While most entrepreneurs don’t have world famous executives mentoring them, the importance of such interactions is obvious. According to an analysis conducted by Endeavor, a nonprofit organization that supports high-impact entrepreneurs across the world, companies whose founders have been mentored by a top-performing entrepreneur are three times more likely to go on to become top performers themselves.
However, connecting with mentors is important for everyday entrepreneurs as well. Kabbage, Inc., a global financial services, technology and data platform, recently surveyed more than 200 small business owners throughout the U.S. to evaluate the importance of mentorship for this group. Their findings prove the point:
- Only 22% of small businesses had mentors when they started their business.
- 20% of small businesses fail in their first year, 30% of small businesses fail in their second year, and 50% of small businesses fail after five years
- 92% of small business owners agree that mentors have a direct impact on the growth and survival of their business.
- Of all respondents, 89% of small business owners who didn’t have a mentor wish that they did.
- 61% of current small business owners mentor others, and 58% specifically mentor younger entrepreneurs
Popular Bank’s bid to streamline small-business lending (American Banker) Rated: A
Popular Bank in New York has contracted with Biz2Credit to use its software for automating commercial loan approvals and to outsource the underwriting of certain small-business loans — a move that is part of a broader effort among banks to better compete with online lenders.
The $9.5 billion-asset Popular Bank started using the loan software earlier this month, said Rohit Arora, the CEO of Biz2Credit, an online marketplace that connects lenders and small businesses seeking credit.
Financial terms of the contract were not disclosed.
Judge tosses RICO claims against Montel Williams, payday loan site (Reuters) Rated: A
TV personality Montel Williams and a payday loan website he endorsed do not have to face racketeering charges for allegedly marketing illegal payday loans, a federal judge in California ruled on Tuesday.
U.S. District Judge Jeffrey White in Oakland granted a judgment in favor of Williams and online firm MoneyMutual, saying borrowers suing them failed to show that they participated in coordinated activity to commit fraud, as required for claims under the U.S. Racketeer Influenced and Corrupt Organizations Act.
What challenger banks get about small businesses that banks don’t (American Banker) Rated: A
The ranks of challenger banks offering financial products and services to small businesses are growing.
But what do these firms offer that banks don’t or won’t?
In interviews, several executives argue that they make the process easier and more user-friendly. Loans can be approved quickly and digitally and challenger banks say they can provide a better customer service experience than traditional institutions.
Strong mobile apps
Only 52% consider their bank’s mobile banking solution to be satisfactory, according to Javelin surveys.
Even Financial acquires Birch Finance, a credit card rewards startup (Tech Crunch) Rated: B
On the heels of a funding round to the tune of $18.8 million, Even Financial has acquired Birch Finance for an undisclosed sum.
Cred Adds PayPal, Goldman Sachs, Tradeshift Executives to Global Leadership Team (Business Wire) Rated: B
Cred, the leading provider of crypto-backed lending with over $250 million in credit facilities, today announced the addition of three executive team members. Maxim Rohkline joins as Chief Product Officer, James Alexander joins as Chief Capital Officer, and Richard Oh joins as GM of Asia. Each executive brings a 20+ year proven track record of financial technology innovation, spanning capital markets, online lending, payment systems, risk management, and analytics.
Factual Data Announces Integration with LendingPad (Business Wire) Rated: B
Factual Data, one of the nation’s premier providers of credit and data verification services to lenders nationwide, today announced an integration of its credit reporting capabilities with LendingPad (www.lendingpad.com), a leading provider of loan origination software headquartered in McLean, VA.
This integration allows clients to order tri-merged credit reports directly from Factual Data. Credit reports are merged in LendingPad’s document management system and liabilities data is updated in real time. The integration is available to all LendingPad users and will automatically populate credit information into the platform.
White Oak Commercial Finance Hires New Talent to Meet Growing Client Demand (AP News) Rated: B
White Oak Commercial Finance, a division of White Oak Global Advisors, today announced the appointment of Robert Dean to Managing Director of Risk Management for ABL and Factoring. Mr. Dean joins from Wells Fargo Capital Finance, where he served as Senior Vice President and Regional Sales Manager responsible for sourcing and structuring asset-based financing for middle-market companies with credit needs ranging from $5 million to $40 million.
Funding Circle backs independent alternative to Black Friday (Peer2Peer Finance News) Rated: AAA
FUNDING Circle has teamed up with small business campaign group Just A Card to provide an alternative to the annual Black Friday shopping event.
The peer-to-peer business lending giant will help promote the Just A Card campaign – run by artists, designers and small business owners – to encourage people to shop locally in the run up to Christmas.
The joint campaign will take place during Just A Card Indie Week on 19 November, the week before Black Friday where bigger retailers hold sales.
Monzo, the UK challenger bank, raises £85M Series E at a £1B pre-money valuation (Tech Crunch) Rated: AAA
Monzo, the U.K. challenger bank that now boasts more than a million customers, has raised £85 million in Series E funding. The round is led by U.S. venture capital firm General Catalyst and Accel. Existing backers Passion Capital, Goodwater, Thrive Capital, Orange Digital Ventures and Stripe also participated.
Meanwhile, the bank upstart is also planning to launch a large crowdfunding round later this year. Like a lot of other fintechs — and before it was fashionable — Monzo has historically opened up its fundraising to its passionate community and other armchair investors.
iwoca becomes first business lender to connect to UK bank via Open Banking (Fintech Finance) Rated: A
iwoca, one of Europe’s fastest growing small business lenders, has today successfully released Open Banking for all new customers with a Lloyds Bank account. The company becomes the first ever business lender to connect with any of the UK’s nine largest banks under the Open Banking initiative, launched in January 2018.
By securely linking their Lloyds Bank data, business owners can now provide iwoca up to five years of transaction history with a few quick clicks of a mouse. This speeds up the lender’s already swift application process even further for Lloyds customers, reducing the time they spend submitting bank information to less than 60 seconds.
P2P platforms reassure investors over risks of borrower litigation (Peer2Peer Finance) Rated: A
A property developer who borrowed money from Lendy is threatening to sue the P2P property platform and its investors for £10m, after Lendy put the developer’s loans in default.
Lendy has described the threat as “vexatious” and with “little prospect of victory.”
This has prompted Lendy investors who are on other platforms to seek clarification on the risks involved in the wider sector.
OakNorth: How AI Can Fuel Banks’ Return To SMB Lending (PYMNTS) Rated: A
Small businesses (SMBs) left behind by their banks, thanks to tightening risk and capital requirements post-financial crisis, certainly left a gap in the SMB lending market that alternative and marketplace lenders rushed to fill. In the U.K., support for FinTech, as well as challenger banks, to boost competition in the small business lending market is driven by the oft-repeated conundrum for this industry: small businesses are more complex than a consumer, yet not as lucrative as a large enterprise, and are, therefore, unattractive borrowers to traditional, large lenders.
With a growing community of alternative finance (AltFin) players, banks have taken to either letting AltFin handle filling the small business lending gap or partnering with and acquiring those FinTech firms to retain their SMB customers. Yet, a gap remains. While the Goldilocks Conundrum offers a simple explanation as to why, a deeper dive into the issue of small business bank lending reveals a far more complex issue.
According to OakNorth Analytical Intelligence, both large banks and alternative FinTech firms are struggling to overcome the challenges of SMB lending, and it often comes down to data. Amir Nooriala, COO of OakNorth, said that to underwrite an SMB loan, financiers have to take in and analyze unstructured data.
X Financial’s Kevin Zhang Is Long-Term Bullish For China’s P2P Sector (China Money Network) Rated: AAA
China’s online peer-to-peer (P2P) lending industry will grow at an estimated annual growth rate of 30% to 40% after the government’s tightened regulations weeding out bad and small players in the following two to three years. That’s the projection of Kevin Zhang, chief financial officer of X Financial, a Chinese P2P lender that completed a listing in New York two months ago.
European Marketplace Lender Lendix Changes its Name to October (Crowdfund Insider) Rated: AAA
The news was leaked last week. Now it’s official. From its Paris headquarters, Olivier Goy, founder and CEO, announced that the European lending marketplace formerly known as Lendix is changing its name into October. With this name change the company reasserts its ambition to expand both into new geographies and new products.
Why October? Among other things, the name celebrates the 4th anniversary of the company founded in October 2014. But more importantly, it is better suited to support the company’s international ambitions. Earlier this year, Lendix / October raised €32 million to fuel its international expansion. The marketplace already operates in four countries: France, Spain, Italy and the Netherlands where it has helped finance more than €230 million worth of SME loans. October as a name is easy to understand, to remember and to spell in most languages.
Another important reason behind the name change is that October as a name frees the company from an exclusive association with the lending category. We can expect more announcements soon. A banking license? Bonds retail? An equity platform? We can expect the unexpected from October.
Ireland’s first online peer-to-peer lending platform for property investors went live yesterday.
Property Bridges is targeting investors who are finding it difficult to secure a loan from a bank, or who need funding relatively quickly, with people able to invest in projects with as little as €500.
Marc Rafferty – who was also an investor in the SME peer-to-peer lending platform Linked Finance – is one of the Co-founders of Property Bridges.
These are the 25 most innovative FinTech startups in the world, according to KPMG (Business Insider) Rated: AAA
KPMG, a global network of professional firms providing audit, tax and advisory services, has just published its ranking of the 100 most innovative fintech start-ups.
Several factors were taken into account to establish this ranking, including the amount raised on average over a year or the degree of innovation of their products or services.
24. N26 – Offering a mobile banking app that operates without a single physical branch, N26 is expecting to enter the US market in the first quarter of 2019 — the company is a new entry in this year’s ranking.
22. Monzo – Monzo, a new entry to the list, is a digital bank focused on building the best current account in the world.
19. Klarna – Klarna is a leading European provider of e-commerce payment options that distinguishes payers from buyers — the company came 14th in last year’s ranking.
5. SoFi – Social Finance Inc. is an online finance company that provides lending products, such as student loan refinancing, mortgages, and personal loans — SoFi came 11th in last year’s ranking.
1. Ant Financial – Ant Financial Services Group is dedicated to using technology to bring the world equal opportunities.
Their technologies, from blockchain and artificial intelligence to security, the Internet of Things and computing, have helped Ant Financial to “serve the unbanked and underbanked”.
BlockFi Blockchain Crypto Lending Platform Expands Services to the International Stage (Bitcoin Exchange Guide) Rated: A
BlockFi, a blockchain-based platform backed by Galaxy Capital, is taking its lending services to the global market.
The primary objective of BlockFi is to provide incremental liquidity for clients in the cryptocurrency space. Recently, the company expanded its customer service team to onboard Spanish and Mandarin speakers. In Q3 2018, half of the traffic on the BlockFiwebsite came from users residing outside the US. These foreigners were also responsible for 33% of loan applications on the platform.
Peer-to-peer lending group puts in AU$ 100m funding for South Australia home battery scheme (Energy Storage News) Rated: AAA
An extra AU$100 million (US$70.76 million) of funding could be put into a rebate scheme for households buying energy storage systems in South Australia, after a peer-to-peer lending group stepped in.
Peer-to-peer lending company RateSetter has agreed to finance the sum as part of the South Australian government Home Battery Scheme, which has committed to granting 40,000 households in the state up to AU$6,000 each in subsidies towards the purchase of batteries for use in home solar-plus-storage solutions. The Home Battery Scheme also allows households to finance the unsubsidised remainder of the cost, as well as rooftop solar. Launched in September, the scheme is partly motivated by the need to help manage peaks in energy demand on the state’s grid network.
Australian neo-bank Xinja hires Brett King as Advisor (FinExtra) Rated: A
Xinja, which is building a 100% independent digital bank, or ‘neobank’ for mobile, (subject to it receiving a banking licence) is adding significant global expertise to its organisation with the announcement that Brett King will act as a permanent advisor to the Board, and help guide Xinja’s strategic direction.
Brett King founded neobank Moven in 2011, which launched the world’s first mobile, downloadable bank account. He is widely considered the most influential expert on retail banking innovation globally.
How do P2P companies handle defaults? (The Economic Times) Rated: AAA
Many investors get excited the moment they hear that P2P lending can earn them higher double-digit returns. However, the very next moment they would ask: what happens if the borrower defaults? How do P2P companies handle such defaults.
To begin with, P2P companies assess the financial footprints of the borrower through different sources as per their own credit evaluation system. “We try to ensure that loans are advanced to genuine customers with a structured credit evaluation process. Usage of alternate data also helps in refining the process to gauge the intent of a customer,” says Dhiren Makhija, co-founder and CEO, Cashkumar.
Pramod Akhramka elected President of the association of NBFC P2P Platforms (News Barons) Rated: B
Pramod Akhramka, Founder and Managing Director of OML P2P has been elected as the President of the newly formed association of NBFC P2P Platforms. Rajiv Ranjan, Founder of PaisaDukan has been appointed as the Secretary and Mukesh Bubna, Founder of Monexo has been elected as the Treasurer of the association.
To represent the NBFC-P2P lending industry at international forums, existing and new players in the industry has formed an association of NBFC P2P Platforms.
New tech and FinTech: opportunity and risk in Singapore case study (The Nation) Rated: AAA
DISRUPTIVE technology evolution has made a wide impact to global economies, the very first forefront business that feel this in both positive and negative way is financial service industry.
Due to the nature of business has been digitised and operated both locally and internationally when conduct business transaction and service. In this “global-digitisation” context, financial service firm must excel how to harness these technologies to improve efficiency and enhance customer experiences. New tech and fin tech in particular, have been increasing adopted by not only financial industry but also other businesses as well. This promote the collaboration and interdependency within and outside of the industry.