Bizfi, a small business lending platform, has hired John Donovan as its CEO; after working at Mastercard, Donovan had served in several Lending Club roles, including COO, through 2012; he has since served on various boards; Bizfi is on target to lend a cumulative $600 million by end of 2016. Source
Funding Circle is considering more securitization deals with demand currently high for asset-backed securities with marketplace loans; Funding Circle was the first to securitize its loans in the UK with its £130 million securitization deal in April 2016; Samir Desai of Funding Circle says the firm has plans to do more securitizations in the near-term. Source
Manatt, Phelps & Phillips, LLP has released a report based on survey results from 75 executives and investors at banks, fintech companies and private equity firms; Lend Academy provides a summary of the report in their article; report focuses on the interest from regional and community banks in partnering with fintech companies; high interest from these banks since the partnerships can help them provide their services at a lower cost and also expand geographically; survey results find that the majority of regional and community banks are already engaged in partnerships with fintech firms. Source
ID Analytics LLC has launched the Online Lending Network; launch of the network was announced at Money 20/20; network is focused on responsible lending, borrower protection and security; Lending Club, Prosper Marketplace and Marlette Funding are founding members; member firms have access to data that can help in detecting fraud and assessing risk. Source
Lending Club has announced an auto refinancing product targeting consumers; Lend Academy provides more details in their article with insight from Todd Denbo, Vice President of Consumer Auto Lending at Lending Club; Lending Club seeks to help make the auto refinancing process easier for borrowers; finds a $40 billion market for auto refinancing which it thinks will expand with greater convenience for consumers in obtaining auto refinancing. Source
This week, the Consultative Group to Assist the Poor (CGAP) proposes improvements to the loosely-regulated fintech sector in sub-Saharan Africa, particularly Kenya; CGAP is a global partnership of 34 leading organizations advancing financial inclusion; they note fintech companies may inappropriately publicize a borrower's personal information if they default on a loan, and others may sweep a user's social media data with minimal notice to the consumer; a key step, by law and proactive process, is to rigorously include all fintech platforms under existing laws for lenders in Kenya. Source
An online lending startup with a unique concept has raised $500,000 in seed funding; CreditMate seeks to offer online loans for bikes and scooters in India; the company has partnered with 25 dealers in Mumbai and the process works similar to an auto loan; borrowers can identify the bike of their choice and work with the dealer for purchase and loan approval. Source
Stress testing from Funding Circle has reported its loan platform would still provide investors with a net return of 6.4% given a worst case market scenario; while effects from Brexit continue to be debated, market skeptics are not as optimistic as the UK platforms; they foresee stagflation in the UK characterized by higher unemployment and slowing GDP growth; they are also concerned about a lack of skin in the game which has prompted parliament member, Chris Philp, to request from the Financial Conduct Authority that a portion of each firm's loans include balance sheet capital; while marketplace lending executives are against this approach, policy makers are considering it. Source
PeerStreet announced that they have crossed $150 million in originations after one year in business; the company launched at Money 20/20 last October; so far the platform has experienced zero losses, providing returns between 6% and 12%; PeerStreet's weighted portfolio loan-to-value is 65%. Source
Venture capital investment in marketplace lending is slowing as firms are struggling to become profitable; in 2015 venture capitalists invested $5.2 billion in 132 marketplace lending deals; in 2016 that total is down to $2.2 billion and 65 deals, according to a report from PitchBook Data; Moody's has also reported on a lack of profitability in the sector; with a key focus on achieving profitability it seems there are a few themes that will be important to watch in the industry including investor channels, unified methodology, capital usage, partnerships to increase demand and more reliance on institutional cash. Source