Mintos Reaches 50M Loan Volume Milestone

Mintos logoP2P lending marketplace Mintos crossed 50 million Euro in loans to both private individuals, as well as small and medium sized businesses after 18 months of operations. Mintos marketplace arranges loans from 14 non-bank lenders, which have joined the marketplace from the Czech Republic, Estonia, Latvia, Lithuania, and Poland.

According to funded loan volume, to date most money has flowed into loans in Latvia’s – 33%, Lithuania’s – 31% and Estonia’s – 23%.

‘All around the world, peer-to-peer lending concept is slowly replacing bank services from which the commercial banking sector is retreating. Today, banks no longer conduct the main mission of the financial system — connecting those postponing consumption with those who are consuming today, i.e. connecting savers and borrowers. Deposit rates are close to zero or even negative, while access to credit is limited. This increases the non-bank financial services market, which offers consumers easy, convenient and affordable services,’ emphasizes Mintos CEO and co-founder Martins Sulte, predicting that by year end, investors through Mintos will have financed EUR 100 million in loans. Continue reading

Interview – Finbee the First Year

P2P-Banking.com Interview with Laimonas Noreika, CEO of Finbee

You launched Finbee a year ago. Can you sum up the major developments since?

More than 3,000 investors have issued 2M EUR worth of loans via FinBee and none of them lost any money due to a default and our compensation scheme. We are very proud for this result.  We have a reliable and highly skilled team that has built a company that is constantly growing. We are in full legal compliance with existing regulation and are constantly working on developing new products and features for our investors and borrowers.

What were the biggest challenges in this first year?

P2P lending is a relatively new concept in Lithuanian lending market, so raising awareness and overcoming scepticism was one the biggest challenges that we’ve faced from day one. Also, when we started to expand, building a team that can deliver results while maintaining highest standards was also time consuming. From technical perspective, learning the dynamics of supply and demand in FinBee auction was also something that we put a lot of effort to.

finbee-team

In your opinion, which 3 most important skills does a CEO need to successfully lead a fintech startup?

In my personal opinion, a key feature that a CEO has to be experienced in is team building. Even the most outstanding CEO will not be able to achieve much without a great team. A great manager has to have a diverse experience in corporate governance, finance, legal matters, marketing and IT. Also, I would like to emphasise, that simple and transparent communication is vital for a CEO.

Are collection and default figures in line with the expectations & projections you had a year ago?

Current default figures are better that we expected and projected. We expected to operate with 8 to 10 percent of non-performing loans. Currently we have 2.25 percent (it worth noting that we consider a loan to be non-performing when two monthly instalments are missed, that is when loan is 60+ days late). We also project 40 percent recovery of non-performing loans. So we expect 4.8 – 6 percent losses after recovery. Having in mind that investors now invest on 26 percent interest rate on average, they can expect 20 percent returns even without our compensation fund.

We achieve this by minimizing the chance of default with wide range of measures. For example, we check every single borrower using more criteria than is required by regulation. Also, we meet each and every one of them personally. We confirm only 7 percent of loan requests and only then pass them to the investors. Continue reading

Silver Bullion Reports First Year Results for Gold & Silver Secured P2P loans

Silver Bullion Pte Ltd in Singapore reported today, on the anniversary of the launch of their bullion secured peer-to-peer(P2P) loan platform, that the platform has funded over S$11 million across more than 400 successfully matched loans. There were zero occurrences of borrowers defaulting on their loans. One hundred percent of lenders, with loan tenures expiring within the first year, received their principle with interest on time.

Launched on 5th August 2015, Silver Bullion offers a p2p marketplace that allows borrowers to obtain a loan using physical gold and silver bullion as collateral. This gives lenders, seeking a good rate of return, confidence that their investments are safe.

Silver Bullion’s CEO, Gregor Gregersen, commented: ‘The first year results of our P2P loan platform shows that owners of physical gold and silver like to have the option to be able to borrow short term funds at good rates with the bullion that they store with us. Now, they are able to reinvest with the borrowed funds whilst continuing to own bullion and benefit from rising gold and silver prices.’

P2P-Banking.com conducted an interview with Gregersen earlier this year.

silver-bullion-vaultDue to the safety that Silver Bullion’s loan platform gives to lenders, 72% of the matched loans were initiated by borrowers. The company has seen more than 30 loans matched consistently each month since March 2016 – a rate of more than 1 matched loan per day. Interest rates across all loan tenures currently hovers between 2.5% and 4.5% per annum.
Unlike unsecured P2P lending platforms, loans matched by Silver Bullion’s lending platform are fully backed by physical gold and silver. Loans with tenures longer than 6 months begin with a collateral-to-loan value of 200%. The exceptions are loans with the 1 month tenure which have a lower collateral-to-loan value of 160%.<

Borrowers’ collateralized bullion is stored at Silver Bullion’s vault, The Safe House. They are covered by one of the most comprehensive insurance policies in the industry that also insures against inside jobs and any unexplained losses.

 

International P2P Lending Marketplaces – Loan Volumes July 2016

The following table lists the loan originations of p2p lending platforms in July. Zopa leads ahead of Funding Circle and Ratesetter. Assetz Capital and Lendinvest achieved a big surge in volume. The total volume for the reported marketplaces adds up to 341 million Euro. I track the development of p2p lending volumes for many markets. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending services.

Investors living in national markets with no or limited selection of local p2p lending services can check this list of marketplaces open to international investors. Investors can also explore how to make use of current p2p lending cashback offers available.

P2P Lending statistic july 2016

Table: P2P Lending Volumes in July 2016. Source: own research
Note that volumes have been converted from local currency to Euro for the sake of comparison. Some figures are estimates/approximations.
*Prosper and Lending Club no longer publish origination data for the most recent month.

Notice to p2p lending services not listed: Continue reading

Regulatory Development of Peer-to-Peer Lending in Taiwan

This is a guest post by Hungyi Chen, Ph.D. candidate at the Graduate School of Law, Nagoya University. He is researching alternative finance in East Asia.

1. Relevant Background

Internet finance, including (1) online stored payment by non-bank, (2) crowdfunding and (3) peer-to-peer lending becomes hotly debated issues in Taiwan recently. To boost the development of financial innovation, the regulation of online stored payments by non-banks was already implemented on January 2015 after discussions and debates between financial authority and platforms. Besides, a regulatory framework for equity-based crowdfunding has also been enacted in the end of April 2015 and amended in the early of January 2016.

In order to encourage and accelerate the development of fintech industry in Taiwan, the financial authority, Financial Supervisory Commission (FSC) of Taiwan, has published Fintech Development Strategy White Paper on May 2016[i]. One of main goals is evaluating the possibility of introducing the mechanism of P2P lending into Taiwan’s capital market and providing a regime for regulating this industry.

Some business models of P2P lending are forbidden due to conflict with The Banking Act[ii] in Taiwan. Recently, it is considered to be introduced in Taiwan and evaluated by the recently established project team of the financial authority in Taiwan, Financial Supervisory Commission (FSC)[iii]. Despite the fact that the attitude toward P2P lending industry of financial authority in Taiwan is still vague, as of July 2016 there are three P2P lending platforms already providing their services in Taiwan, including Lend & Borrow[iv], Wow88[v], XiangMinDai[vi]. They have tried to design their business model to avoid potential legal risks. For better understanding of the P2P lending industry, this article tries to provide a brief regulatory overview of Taiwan in following part.

2. Regulatory Overview of P2P lending

Currently, there is no any specific regulation toward this industry in Taiwan. Recent official document[vii], indicate that the business model of P2P lending in Taiwan should avoid to involve in any activities of accumulating capital from general public or issuing any securities. XiangMinDai, a P2P lending platform in Taiwan, has analyzed by FSC of Taiwan. The former chairman of FSC of Taiwan, Ms. Wang, has stated that ‘…the business model of XiangMinDai is majorly providing services of debt transaction, which does not involve in activities of depositing or charging fund. Accordingly, it is not the regulatory scope of FSC at this moment…[viii]

Although there is no any financial regulation of P2P lending in Taiwan, Banking Bureau of FSC has issued a statement[ix] on April 14, 2016, pointing out some legal compliance issues for P2P lending platforms, including (1) platforms should not involve in issuing any securities, (2) ensure privacy of customers, (3) activities of deposit and store-value business without licenses are forbidden, (4) illegal ways of debt-collection is forbidden.

Taiwan Figure 1

Within 2 weeks, Banking Bureau of FSC, announced another statement[x] for supplement, indicating that (1) the interest rates of the case on the P2P lending platform is 30.15%, which may be illegal according to Criminal Act in Taiwan[xi], (2) legal concern of breaking the law of Multi-Level Marketing Supervision Act[xii] and Fair Trade Act[xiii]. Continue reading

Development and Regulation of P2P Lending and Equity-based Crowdfunding in Hongkong

This is a guest post by Hungyi Chen, Ph.D. candidate at the Graduate School of Law, Nagoya University. He is researching alternative finance in East Asia.

1. The recent development of online alternative finance

Given the recent trend that Fintech is rapidly growing in the world, in order to maintain the role of international financial center, the financial authority of Hong Kong has been aware of issues relating to Fintech industry[1]. On November 13th, 2015, Stored Value Facilities Payment Systems, such as online stored payment business as PayPal, is allowed to operate by non-bank[2]. This is a milestone for Hong Kong including non-bank of operating business highly relevant to conventional bank.

In order to enhance the development of startups in Hong Kong, financial technologies (Fintech) are emphasized by the authority since the investment of Fintech is a target of many venture capitalists[3]. Nevertheless, compared with other jurisdictions in Asian countries, which already lightened entry requirement to encourage non-bank for engaging business of equity-based crowdfunding, such as Japan, Korea, Malaysia, Taiwan, and Thailand, the entry requirement of Fintech, especially alternative finance may be stricter in Hong Kong.

Until now, there is still no equity-based crowdfunding platform established in Hong Kong. However, the huge demand from capital market gradually leads the development of crowdfunding in Hong Kong, especially debt-based crowdfunding, which is also known as Peer-to-Peer Lending. Currently, there are 4 major peer-to-peer lending platforms, including BestLend, GoLend, Monexo, and WeLend.

2. Relevant industry background

With unique selling factors, the peer-to-peer lending platforms may have a rapid growth in the near future. On one hand, from viewpoints of investors, the deposit rates of savings are from 0%~0.001%[4]. Even the deposit rates of fixed deposit of 12 months are from 0.15%~0.2%[5]. Additionally, inflation rates are around 4% continuously in 2013 and 2014[6], which means the real interest rate may be negative in Hong Kong. Accordingly, there are strong incentives for investors to vitalize their capital.

On the other hand, from viewpoints of borrowers, there are two fundraising channels for loans, including banks (Licensed Banks, Restricted License Banks, Deposit-taking Companies) and Money Lenders. Since the financial authority restricted the mortgage market of banks to prevent a real-estate bubble, it is difficult for borrowers to get the loan amount they need from banks by mortgage. As a result, they turn to Money Lenders as an alternative opportunity. Although the interest rates of Money Lender are generally higher than banks, compared with banks which normally take 1-6 weeks for examining procedure, the process of Money Lender is more simplified[7]. Continue reading

Overview of the Regulatory Framework for P2P Lending and Equity-based Crowdfunding in Singapore

This is a guest post by Pawee Jenweeranon, a graduate school student of the program for leading graduate schools – cross border legal institution design, Nagoya University, Japan. Pawee is a former legal officer of the Supreme Court of Thailand. His research interests include internet finance and patent law in the IT industry.

1. Introduction

In the recent years, it is inevitable that the financial technology or Fintech takes the significant role toward the evolution of financial services industry in this region. In other words, Fintech normally be used to improve the financial industry services.

In 2015, the Monetary Authority of Singapore (hereinafter referred to as “MAS”) has committed two hundred twenty five million Singapore Dollar (around 166 million USD) to support the development of Fintech industry for the startup ecosystem in the upcoming years[1]. This is a good reflection of the significance of the financial technology or Fintech development in Singapore.

From the economic perspective, Small and Medium Enterprises (hereinafter referred to as “SMEs”) are important part of Singapore’s economy. SMEs account for 99 percent of all registered enterprises in Singapore[2]. From this reason, enhancing the competitive capacity of Singapore SMEs is essential for Singapore economy development.  Even almost all of the SMEs in Singapore are supported by the Governmental Enterprise Development Agency and Centers[3], (more than 100,000 SMEs got funding support by the Singapore government[4]); however, internet financial technology was also proposed as an alternative mechanism for enhancing the competitiveness of Singapore SMEs in the recent years[5].

 

2. Regarding Peer to Peer Lending


2.1 Background

Generally, there are many peer to peer lending platforms in Singapore; however, they normally lend money to businesses rather than individuals due to the strict regulation for money lenders. The additional limitation on lending to low-income borrowers[6] who are Singaporean citizens or permanent residents which is another requirement should be considered by the lenders.

In general, money lending in Singapore is mainly regulated by the Moneylenders Act 2010 and the Moneylenders Rules 2009. For the Moneylenders Act 2010, due to the main purpose of this act is to develop consumer protection mechanism to protect borrowers of small amount loans[7], this is the reason why the act provides stringent limitation for moneylenders to operate their business. This is another key different of money lending law of Singapore compared to other countries in Asia such as Hong Kong which focusing more on lending activity[8]. Briefly, the act requires moneylenders to hold the Moneylenders license with obligations and limitations for licensee[9].

In Singapore, even there are strict regulations in the existing law relating to a money lending business; however, there is the legislative effort of the Singapore government to address the issue regarding Securities-based Crowdfunding, which can reflect the understanding of the Singapore government toward the development of Financial Technology (Fintech) and the supporting regulatory framework.[10]

2.2 The Regulatory Framework for Peer to Peer Lending Business

From the document published by the MAS on Lending-based Crowdfunding – Frequently Asked Questions (FAQs)[11], generally, the operation of P2P lending is restricted by MAS under the Securities and Futures Act (Cap. 289) (SFA) and the Financial Advisers Act (Cap. 110) (FFA).

Specifically, the P2P lending business needs to prepare and register a prospectus with MAS in accordance with Section 239(3) of the SFA. In addition, not only the registration of the prospectus but also the P2P lending platform need to follow the licensing requirements, particularly, the P2P lending business which fall within the scope provided by MAS needs to hold a Capital Market Services (CMS) license. Continue reading

Lendico and PostFinance Launch Joint Venture in Switzerland

PostFinance one of the largest five retail banking institutions in Switzerland will partner with Lendico to launch joint venture Lendico Schweiz, which will facilitate loans to SMEs in Switzerland.

From the last quarter of 2016 onwards, the company will facilitate crowdfunding for small and medium-sized enterprises (SMEs) in Switzerland. It is entering the market in close collaboration with PostFinance, a subsidiary of postal carrier Schweizerische Post.

Together the partners would like to establish a new form of SME financing in Switzerland. The aim of the joint venture is to provide the numerous Swiss SMEs with a modern alternative to traditional bank financing. The two partners are contributing their complementary expertise in customer contact and the entire lending and repayment process to the joint venture.

Sources say PostFinance was barred by regulation to directly lend to SMEs and had to find a third party partner to enter this market.

‘With 110 years of experience in Swiss banking services and around three million customers, we can think of no better partner than PostFinance for our entry into the Swiss market. As part of the continued expansion of an international credit marketplace, this joint venture represents a significant step in our business development,’ says Dr Dominik Steinkühler, co-founder and managing director of Lendico.

Hansruedi Köng, CEO of PostFinance, is delighted to be able to join forces with Lendico, a partner which has established itself and enjoyed success internationally in a rapidly expanding industry. ‘Our vision for this cooperation is to take crowdlending in Switzerland from niche status to the mass market. The combination of Lendico’s innovative capacity and our structures in Switzerland offers the best conditions for Lendico Schweiz AG to become a market leader in the future.’

Spain: CNMV authorizes MytripleA & Lendix as crowdlending platforms

The Spanish Securities Exchange Commission (CNMV, Spain’s financial regulator) has authorized MytripleA as a Platform for Participatory Financing, the formal name for a p2p lending platform. This is one of the first actions to implement Law 5/2015 Promotion of Corporate Financing. MytripleA already benefits from a Payment Institution license (which can be passported within the EU) granted by the Bank of Spain, which authorizes MytripleA to make loan disbursements and receive loan instalments within the regulatory environment for banking payments. This is an additional regulatory requirement in Spain, which is not required by other European countries.

With this new authorization, MyTripleA becomes the first crowdlending platform to have both of the required authorizations in Spain. Competitors entering Spain, will not be able to use the the so-called passporting provisions from a financial regulator outside of Spain and will need to apply for a Platform for Participatory Financing license before being able to operate in compliance with Spanish regulations Law 5/2015 Promotion of Corporate Finance provided a unified legal framework for crowdlending platforms and securitized funds, and made CNMV responsible for their creation, authorization and supervision. Crowdlending has experienced rapid growth across Europe. The Spanish market last year grew 266% according to the website P2P-Banking.com. Within the new regulatory framework and with the supervision of CNMV, a greater degree of awareness of the alternative financial services market is expected.

French Lendix announced that it received its formal CNMV accreditation to operate as a P2P lending platform in Spain. The Spanish entity will be the first Lendix international market to open. It will target financing of credits to SME, for amounts ranging from 30,000 to 2,000,000 Euro, duration of 18 to 60 months and at interestrates comprises between 5.5% et 12%. Companies presented on the platform will be selected and analyzed by Lendix credit analysis team and will need to generate a turnover of at least €400’000. Non accredited private investors* will be able to lend up to 3,000 Euro per project with a total maximum yearly amount of 10,000 Euro, while no limit will apply to accredited private investors nor institutional investors. The launch of Lendix’s spanish platform is scheduled for Q4 2016.

Equity crowdfunding platform Crowdcube also received authorization.

Continue reading