Shadow banking in China increased to 58 trillion yuan which is more than 80% of GDP, according to a report from Moody's; total social financing has now risen to an estimated 220% of GDP; Moody's says light regulation in the nonbank sector is a concern and the new regulations proposed by the government are needed to help manage risk and keep the business from causing major liquidity problems for the broad market. 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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Lending Club announces Q3 earnings on November 7th; LendingRobot provides a review of past quarters including comments on regulation, revenue and loan performance; shares three things they are looking for in the next release including results from corrective actions, a clear path forward for 2017 and a hint of something new. Source
Future Finance has received commitment for £30 million from the European Investment Fund (EIF) to lend to master's degree students supported by the Erasmus+ European program; Future Finance is a student lending platform active in the UK and Germany; Erasmus+ subsidizes career skills-driven education for over 300,000 higher education students across the European Union; EIF's commitment involves loan guarantees that will encourage investing and borrowing on Future Finance's platform; it has launched a "Call for Expression of Interest" targeting additional financial institutions that finance master's degree students crossing national borders in the EU. Source
Small Change is claiming to be the first real estate crowdfunding platform that's issuing investments under Reg. CF; the company focuses on investment projects with community enhancement benefits; Reg. CF (covered by the JOBS Act Title III) is one of several regulatory frameworks to facilitate private investments; Reg. CF is suited for smaller startups and investment offerings up to $1 million, without the full SEC filing requirements of Reg. A+; in the Crowdfund Insight interview, Small Change CEO, Eve Picker, suggests that they will use Reg. CF for smaller real estate investment projects and broader outreach to all levels of investors, while using Reg. D in parallel to reach accredited investors for larger deals. Source
Legion Capital, a venture capital and advisory firm, has launched a subsidiary called Stage 1 Funding, LLC; the new firm will look to address the demand for small business finance; Joseph B. Hilton of the Hilton Hotel Family will serve as President and they will focus on accounts receivable finance, equipment finance and venture debt or equity. Source
Initiative Ireland is a new peer-to-peer lending platform; they are planning to raise 2 million euros for startup operations through Ireland's Employment and Investment Incentive Scheme; the firm hopes to provide returns of 5% to 7% per year to investors and total loan savings of 20% to 30% for borrowers versus traditional bank lenders. Source
Chinese regulators raided over 40 companies in China to investigate for illegal activities pertaining to the country's newly disseminated laws; investigators found property agents listing homes that owners had not agreed to sell and providing false information about properties; with a focus on real estate property investing, the investigators also found P2P lenders offering down payment loans after they were recently restricted by regulators. Source
Applied Blockchain has been trialling a system for companies to process their invoices on blockchain and in turn will allow the companies to tap the securitization markets; the current trial is with a UK SME called Emplas that makes windows; "Our platform may now allow for securitization of invoices as the underlying for bond issues," Ben-Ari, Founder of Applied Blockchain, tells Euromoney; "It brings transparency as to the ownership and establishes the provenance of invoices for bond buyers in ways that the existing processes and technology simply did not allow." Source
IRA Financial Group, a New York provider of retirement plan solutions, is offering a self-directed IRA for P2P loan investors; the firm has designed the IRA for P2P lending; loan investments in the self-directed IRA would be tax deferred. Source
Student loan marketplace lender, Earnest, has completed its fourth securitization; Goldman Sachs and Barclays were the lead arrangers; portfolio valued at $174.44 million; the October securitization is the fourth for the year with previous securitization deals in February, May and July. Source