Morgan Edwards, chief financial officer at CommonBond gives an overview of the company and the student lending opportunity in this video from LendIt USA 2016. CommonBond provides student loan refinancing but one thing that makes them unique is their "1-for-1" model where they fund an education of a student in Africa for each student loan refinancing. As of April, the company had $625 million in capital committed with zero defaults and zero 30+ day delinquencies.
Morgan believes we are in a growth cycle and capital is here to stay although we may experience some ebb and flows through the cycle. He stated, "Capital flows where there is understanding and there is a return," and highlights several aspects that make this a favorable environment for student lending and marketplace lending broadly.
You can view the full video below:
Online Lending
Scott Sanborn provided the opening keynote presentation at LendIt USA 2017; the appointment of Sanborn has been a critical success factor for Lending Club and the marketplace lending industry; in his presentation he discusses the challenges of 2016 and the significant growth opportunity that still remains ahead; compares the market's potential to the growth of Amazon; provides insight on important factors for growth over the next ten years.
One of the promises of fintech is to expand access to credit to those who have previously been excluded. At LendIt USA 2016 we featured many of the leading companies in the space who are making real progress here.
LendUp and Oportun are both helping underserved consumers in the USA. ZestFinance is providing the underwriting engine that enables lenders throughout the world to expand their customer base and China Rapid Finance is helping the emerging middle class access credit in China.
In the USA there are 53 million people who do not have a credit file with the major bureaus. Oportun creates proprietary risk models that score those people that most of the industry finds unscoreable. The Hispanic community, where they focus, has unique challenges that Oportun is addressing directly.
Zane Wang from China Rapid Finance introduced us to the concept of "EMMAs" - emerging middle-class mobile active users. There are about 500 million people who have quality jobs but do not have credit access - they call these people EMMAs - they are not really underserved, they are in fact completely untapped.
ZestFinance is all about data. They use traditional data sources as well as their own unique sources. They use tens of thousands of data points that enable them to far more accurately underwrite those customers. They provide this technology to platforms in the USA and China.
Sasha Orloff from LendUp works on helping their customers improve their financial situation through their LendUp Ladder, a payday alternative. They do this through education and helping their customers get out of the payday debt traps. They reward their customers when they educate themselves on finance and provide help and support along the way.
Allen Webb of RiverNorth talks about the firm's marketplace lending fund; gives an overview of the portfolio selection criteria; talks about the fund's structure and some of the liquidity challenges presented by marketplace loans; says the firm is planning future webinars to educate investors on the fixed income investment.
