The Cosun Group has issued notice that it would be defaulting on its high yield debt products equal to $45 million; Cosun raised $166 million through the Ant Financial platform and is now unable to meet obligations on a portion of that amount; this leaves investors asking when they will be repaid; Ant Financial is pressing to ensure repayments are made and has stated they would help pay legal bills if investors decide to sue; the fintech giant does not share the blame as they view themselves as a platform for investors to allocate capital, but they also understand the Ant Financial name carries weight and want to help make sure there is a resolution. Source
News Roundup
This page contains an archive of the Global Newsletter summaries and the weekly fintech news roundups.
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Deloitte's third quarter deal tracking report finds a 7% increase in UK deals for P2P lenders in the cumulative 12 months; third quarter of 2016 included 67 deals; deals in the UK increased 21% while deals in the remainder of Europe increased by 29%; the report tracks comprehensive deal activity including fundraising, mergers, acquisitions and partnerships for 50 alternative lenders across Europe. Source
The UK marketplace lending industry is likely to see several factors causing change in 2017; the Financial Conduct Authority has reported several concerns which may increase regulatory pressure; demand for loans and capital investment are also slowing; larger platforms will have a greater advantage while the smaller platforms may see greater challenges; competition and partnerships among traditional financial service providers and fintech companies will also continue to be significant for the market overall. Source
Lend Academy reports on the intersection of banks and marketplace lending in their article; Zopa, the industry's first P2P lender, is leading the way again; it is now the first P2P platform to seek a bank license; SoFi also says it has plans to take deposits and has been leading the market in product expansion; at the same time digital banks are becoming more prevalent and fintech partnerships are occurring industry wide. Source
The Victory Park Capital Specialty Lending Fund has sold its Funding Circle loans; as of October 31, the Funding Circle loans accounted for 7.7% of the portfolio's net asset value; the sale follows the company's announcement to reallocate its portfolio to more of a balance sheet strategy. Source
An increasing number of employers are adding student loan services and contributions to their employee benefit programs; IonTuition.com is one provider for employer related student loan debt services; they have released a survey which reports that 87.7% of participants would consider a student loan contribution program from their employer to be an important benefit; 57.8% also said they were interested in online educational tools from their employer regarding student loan debt. Source
UK marketplace lender Landbay has been granted full authorization by the Financial Conduct Authority (FCA); the platform primarily lends to borrowers seeking rental property mortgage loans; with the FCA authorization the Landbay platform can now seek to offer innovative finance individual savings accounts to its investors. Source
Avant's new partnership with Regions bank is helping growth projections and business development plans for the firm in 2017; Avant says the Regions partnership which began in October is expected to generate 25% of the firm's loan volume in 2017; the partnership includes referrals from Regions for customers who are not approved for loans; the firm also has four other partnerships planned for 2017; it plans to hire 125 new employees and is targeting monthly loan volume for 2017 of $250 million; also says it's launching a credit card product in July; the credit card will be offered to customers not approved for loans on the platform. Source
Marketplace lender Argon Credit has filed for Chapter 11 bankruptcy; its loan underwriting was centered around machine learning algorithms which it marketed as decisioning as a service; offered subprime loans from $2,000 to $35,000 with APRs ranging from 4.99% to 149%; in May 2015 it secured a $75 million debt funding investment from credit hedge fund, Princeton Alternative Funding; prior to that it had raised $5.05 million. Source