FastPay is an online lender and credit provider for digital businesses in the US and UK; the company has partnered with Hitachi Capital America Corp. for a new FastPay for Enterprise product; the new product will provide working capital loans of $10 million or more to digital media enterprises. Source
Non-bank lenders in the Netherlands have been capitalizing on the global financial crisis and decreased lending from banks; Jeroen van Hessen's Dutch Mortgage Funding Company has been a leader in non-bank mortgage lending, a market that now attributes 20% of the 662 billion euros ($693 billion) mortgage market to non-bank lenders; Hessen was a market leader in the non-bank lending movement which has attracted interest from institutional investors willing to bypass traditional channels for higher returns; the effects from non-bank entrants have begun to show more significantly in the mortgage lending market where market share for mortgage originations from the region's top three banks fell below 50% for the first time in 2016; non-bank lending in the Netherlands has also increased interest from surrounding European investors familiar with non-bank platforms. Source
Online lender Avant was one company greatly affected by the industry's challenges in 2016; in May it laid off 60 workers with further reductions in July; it also paused its plans to expand into Australia and offer new auto loans and credit cards; a new partnership with Regions Bank has helped revive the company's growth and it also plans to announce another partnership in February; the new business activity has helped it to begin hiring again and it's currently looking for 25 technologists and some additional customer service support; in 2017 Avant's President, Adam Hughes, says the firm will focus on three main initiatives: growing Avant's core lending product, partnering with more brick-and-mortar banks and launching the credit card product; it also has plans to continue its previous initiatives including Australia expansion and auto loans. Source
The securitization market in marketplace lending continues to strengthen as more lenders utilize this capital route; the LendIt USA 2017 panel on securitization talked through the market conditions and what it takes to do a deal; the panel went through the challenges faced in 2016 and how the industry has come back looking stronger; the industry has gotten back to the fundamentals which are a cornerstone of securitization deals; the vast majority of deals are made up of unsecured consumer loans, but other asset classes including mortgages, student loans and auto have been coming to market; topics touched upon also included barriers to success, vertical versus horizontal interests and the effects of risk retention on the overall market. Source
Lendio reported record growth in loan originations for the fourth quarter and full year of 2016; firm is one of the leading online multi-lender services for small business loans in the US; in the fourth quarter it facilitated loan originations of $70 million and in 2016 loan originations from the platform were more than $240 million. Source
Assetz Capital has now been in business for four years with 240 million British pounds ($307.61 million) in loan issuance; the platform focuses on lending for SMEs and says it plans to double its current originations in the next twelve months; the firm offers secured loans that generate annual returns of 3.75% to 18%. Source
The underserved or underbanked have always had a problem getting access to credit that is affordable. The panel at LendIt USA 2016 entitled, "Providing Access to Credit in Underserved Markets" explored the different types of thin file borrowers around the world.
Lenders first need to understand who they are looking to serve and be sure to define their market. Understanding the type of borrower you are looking to serve will allow you to better evaluate the limitations of the data you will receive from this borrower.
How do lenders look to serve borrowers with a thin file, no file or limited data set from the traditional credit bureaus? They look to compile alternative data to help them evaluate the different borrowers.
These non-traditional lenders will pull some traditional data, as well as alternative credit bureau data and proprietary data such as questionnaires they ask to these borrowers. Alternative data can be phone payment records, bank transaction analysis and social data.
These newer lenders are no longer constrained by technology; banks used to have about thirty variables to analyze a borrower, now companies can look at two or three times that amount and are no longer limited by legacy technology.
LendUp, ZestFinance, China Rapid Finance and Oportun all serve a different type of borrower, but they all extend credit to the non-prime, non-traditional borrower. Serving these types of borrowers has additional impacts as well, the more people that are able to access affordable credit the better it is for broader communities.
To learn more about the latest trends and technology in credit and underwriting please join us at LendIt USA 2017, where we will have a dedicated track covering the market.
StepChange partnered with Barclays to urge the government to proceed at pace with regulating Buy Now Pay Later (BNPL).
HSBC has announced a partnership with Tradeshift that will connect the Tradeshift network of companies to working capital lending at HSBC; Tradeshift has over 1.5 million companies on its platform; it offers HSBC the advantage of seeing the whole supply chain which can add insight for lending decisions; the partnership follows a significant investment in Tradeshift by HSBC last year; Business Insider also notes other fintech bank partnerships and the increasing interest from banks to partner with fintechs for innovative solutions. Source
The Royal Bank of Scotland's NatWest Brand has announced the launch of direct lending platform Esme; the platform will offer loans up to £150,000 ($187,257) for small and medium-sized businesses with approvals in one hour; NatWest developed the Esme platform internally through an innovation lab; the platform was developed to provide a more competitive loan offering and will also support initiatives for cost reduction. Source