The Wall Street Journal reports on publicly listed funds that will purchase marketplace lending loans; the new funds are setup as interval funds and will open access to investors who might not otherwise consider investing in loans made by marketplace lenders; article highlights fees and minimums of offerings by RiverNorth and Stone Ridge. 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.
Then every Saturday we bring you our weekly news roundup of the top 10 fintech stories of the week with commentary from Peter Renton.
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The Ontario Securities Commission has issued a request for high-level experts to join its newly-formed Fintech Advisory Committee; to begin with, the panel is expected to assist with the launch of an innovation sandbox called "Launch Pad;" other expertise at play includes crypto-currencies, fintech platforms, venture capital for fintech, AI and data analytics for finance. 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
Qudian, a financial firm that started as microlender Qufenqi, is sending signals of a possible 2017 IPO, according to Seeking Alpha; according to the reporting, Qudian has hired a foreign CFO and an investment bank, both typical developments for a company looking to go public within the next year; while the company originally focused on small student loans for items like computers or books, they now have broadened their scope and are a consumer lender; loan sizes are still small, about 1,000 yuan ($150) each, but they are on pace for close to $5.5 billion in total originations this year. Source
India company, Bharat Financial Inclusion, has reported financial performance that is demonstrating success with a rural-focused audience, operational cost controls and reduction in cost of funds; this strategy compares with other micro-lenders in India that are seeking rapid loan volume growth in urban centers, but with limited or negative profitability; Bharat announced net income growth of 87.3% to Rs146 crore (US $22 million) in the second quarter ended September 30; the marginal cost for borrowing to fund micro-loans has declined to 9.5% in Q2, and its average interest rate to borrowers stands at 19.75%. Source
Announced today, the MasterCard Foundation is partnering with the Center for Financial Inclusion (CFI) at Accion on a $4.4 million initiative to promote more robust consumer financial protection laws around the world; CFI's Smart Campaign has existed since 2009 and has certified the consumer protection practices of 68 financial institutions to-date; the MasterCard Foundation contribution will support involvement of more parties (such as regulators, non-bank financial institutions and fintech platforms) and more countries; a particular focus will be on sub-Saharan Africa. Source
Privately-owned, US marketplace lender, SoFi, has announced it will be expanding its product offerings to include life insurance by becoming a broker; within the industry the company is primarily known for its student loan refinancing services; it has also been expanding its product offerings to include personal loans, mortgage loans and wealth management in an effort to more actively meet broader financial needs for its clients; Lend Academy provides more details on the life insurance offering and future growth expectations for the company in their article. 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
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
In an interview with P2P Finance News, Adair Turner cites P2P loan securitizations and other evolving forms of structured credit as high risk, causing a potential "red flashing light" for regulators; speaks of the evolution of the asset class as securitization portfolios from P2P lenders have been increasing in 2016; discusses complex structured investment vehicles as the most high risk specifically those issuing short term debt against longer term holdings. Source