UK listed marketplace lending fund, P2P Global Investments, has reported struggling performance in 2016; monthly return in September was 0.23% for a year-to-date return of 3.41%; target annual return is 6% to 8%; peripheral factors such as debt facilities and currency hedges have affected the return; the fund is now selling at a discount of 19.8%; has been steadily buying back shares to help improve the NAV and also using securitization to reduce debt costs; loan defaults and delinquencies have been higher as a result of longer maturities, however the primary factor affecting the return is the broad global diversification of the loans resulting in losses from currency hedging. Source
The new startup, 10X Future Technologies, partners with challenger bank Virgin Money to build a new digital banking platform; the new deal comes to light just one day after 10X Future Technologies was launched to the public; Virgin Money is listed on the FTSE 250 and will count on 10X to build a cloud-based core banking system that will deliver new products in a more cost efficient manner. Source
Funding Circle has announced changes to its borrowing rates for small business loans as of November 7; rates will be lower for higher credit quality borrowers and higher for the lower credit quality loans; says with the new rates, investors can expect an average annual return of 7%. Source
The UK has launched their borrower referral scheme which came about as a government initiative; businesses who apply for loans at the nine largest UK banks and are rejected will be referred to aggregator platforms Funding Xchange, Business Finance Compared and Funding Options; the aggregators will pass information to alternative finance providers who will be able to provide quotes to the business. Source
The UK Treasury has announced it will allow crowd bonds in innovative finance individual savings accounts (IFISAs); crowd bond investors will invest in bonds of companies through crowdfunded platforms with their investments held in a tax sheltered account facilitated by the crowdfunding platform; the expansion of crowd bonds in IFISAs makes the crowdfunded investments more attractive because of the tax shelter, also providing greater benefits for an investment that's not secured by the government's FSCS protection. Source
The P2PFA provides quarterly data on its eight member firms; as of the third quarter it seems to have simplified its reporting to provide only industry and platform origination totals; Kadhim Shubber of FT Alphaville is curious as to why the P2PFA has chosen the new disclosure format which no longer appears to include granular details such as principal outstanding, capital repaid, number of lenders and number of borrowers; he has petitioned the P2PFA for more disclosure and greater transparency, questioning the lack of consistency and transparency in its quarterly data reporting. Source
Zhengyuan Lu, OnDeck's Senior Vice President of Capital Markets, will soon move to investment firm, Victory Park Capital; his last day is Tuesday; Victory Park invests in and provides credit facilities to online lenders, including Avant Inc. and Square Inc.; the last year has been a challenge for OnDeck as investors have not been buying loans at the same pace and this has forced the lender to hold more loans on its balance sheet. Source
UK marketplace lender, Funding Circle, has reported a record month for loan originations in October; the platform originated £95 million worth of loans in October, reporting its highest ever monthly origination volume; the firm's previous loan origination volume record was set in September with £75.2 million in loans; the small business lender now has total loan originations of £1.62 billion. Source
A new UK bank referral scheme began this week with a focus on nine of the region's largest banks; Lend Academy provides more details in their article; the referral scheme will require banks to refer small businesses to alternative lenders if they are denied credit; creates more opportunities for banks to partner with alternative lenders and also significantly expands credit access for businesses. Source
The Federal Council of Switzerland is seeking to make the regulatory framework more flexible for fintech companies; they have instructed the Federal Department of Finance to devise a policy statement setting such a direction; recommendations to be considered include: (a) setting a maximum of 60 days for holding money in a settlement account, which will make settlements better aligned with crowdfunding project funding deadlines, (b) creating of an innovation sandbox in which a platform can accept funds up to CHF 1 million, and (c) establishing a new fintech license, with fewer restrictions than on traditional banks. Source