A report from WDZJ and yingcanzixun.com titled, "2016 China Online Lending Monthly Report (Nov.)" provides insight on China's online lending market in November; says online lending originations reached a new monthly high of CNY 200 billion in November; total historical origination volume of over CNY 3 trillion; 2,454 platforms with eight new businesses and 98 entering suspension or closing down. Source
News Roundup
This page contains an archive of the Global Newsletter summaries and the weekly fintech news roundups.
Every day the Fintech Nexus news team scours the globe for the most important stories of the day to include in our daily newsletter.
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The Financial Conduct Authority released its interim update on crowdfunding rules last week; the update reported that the regulator would be scrutinizing numerous factors pertaining to P2P lending in the UK; one such factor, discussed by the Financial Times, includes the disclosure of loan performance; the introduction of provision funds has caused this disclosure to potentially be misleading for investors; in some cases platforms use provision funds to cover defaults for borrowers; this action could potentially lead to better than actual loan performance on the loans. Source
In their recently completed review, the Financial Conduct Authority (FCA) was particularly worried about some platforms using customer money to buy loans from rival platforms; FCA CEO Andrew Bailey explained that platforms don't have enough loans to present so in turn they use investor money to buy up loans from a rival platform; this is worrisome as investors are not being told the correct risks; Mr. Bailey did not disclose any platforms by name and said the issue was not widespread but worth keeping an eye on. Source
Polychain Capital, a hedge fund that focuses on investing in digital assets such as bitcoin and ether has raised $10 million; the funding comes from venture firms Andreessen Horowitz and Union Square Ventures; the company launched in September with $5 million from 30 investors and is led by Olaf Carlson-Wee who was also the first employee of Coinbase; according to Olaf: "There will be many types of assets codified into the blockchain, and they are all not just going to be on the bitcoin blockchain — it's going to be a number of different assets here. And the best way to invest in that is a diversified portfolio." Source
In Orchard's Weekly Online Lending Snapshot they provide some insight on the Marketplace Lending and Alternative Financing Summit, noting industry performance and data transparency as key themes; data points show gains from publicly traded companies in the industry led by LendingTree with a monthly gain of 19.93% and Square with a monthly gain of 16.17%; in the UK listed marketplace lending funds Ranger Direct Lending led monthly returns with a gain of 24%; the US listed River North Marketplace Lending Fund reported a monthly gain of 0.59%; the LendingClub Issuance Trust LCIT-2016-NP2 was listed as the most recent securitization issuance with a pricing date of December 1. Source
A blog post from Frank Rotman of QED Investors says fintech companies should keep in mind growth strategies from the previous generation; outlines three important phases for business growth, 1) testing 2) scaling and 3) cost efficiency; says growing exponentially in the early phases is not always the best approach and that building a lending business with land grab as a justification for growth is not necessarily the best strategy. Source
Investors in China are increasingly looking for an unbiased, lower cost option for managing their wealth; robo advisors are beginning to fill that void; the new firms are helping the non ultra rich access markets and helping the wealthy allocate their money without fear of a broker who is thinking of the corporate firm; though the data on robo advisors in China is currently thin, China Merchants Securities Co. believes that assets managed by robo advisors will reach over $750 billion by 2020. Source
Originations for Assetz Capital reached a new high in November; for the month, the platform originated 26 million British pounds bringing its total originations to 100 million British pounds for 2016; according to the firm, it is now the third largest business and property P2P lender in the UK. Source
Loot has launched version two of its app which provides for cash deposits and personal finance management; in its newest launch the app has accepted 25,000 new customers; the app helps customers track their spending and provides discounts from affiliated merchants; the version two launch of the app follows a $3.13 million funding round in November. Source
During the week I share the latest marketplace lending news on Twitter...