News Briefing - Crowdfunding, SME And Alternative Finance

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Herewith today's crowdfunding, SME and alternative finance news round-up.

1. UK – Equity 

What Investment reprises the benefits of VCTs and EIS investment.

“Venture capital trusts (VCTs) and Enterprise Investment Scheme investments (EISs) both started out as esoteric investments for wealthy investors. They are now well established, even mainstream, having received over £20 billion of funding over the past 20 years.

The popularity of VCTs and EISs is understandable in these times of restricted pension contributions and increasing tax bills. However, the need for advice is essential for investors to be aware of and able to assess the risks that accompany these investments, including timing and liquidity issues. While they both invest in similar groups of underlying companies with similar qualifying characteristics, VCTs and EISs are very different in their structures and the tax breaks they provide.”

2. UK- P2P

Bridging & Commercial runs a feature on Folk2Folk's attempts to establish 'local' as the distinguishing feature of its brand..

3. US – FinTech

The Wall Street Journal runs a feature on what it identifies as a new ICO gold rush.

“Despite a potential crackdown on U.S. initial coin offerings, many upstart crypto-trading platforms are barreling into uncharted territory.

A wave of token advisers and other ICO specialists are becoming the required service providers who, behind the scenes, are capitalizing on the crypto gold rush that is sidelining traditional venture capital as a funding source.”

4. International – P2P

Forbes runs a feature with leading players from China’s “consolidating” P2P sector, following a recent Lendit conference in San Francisco.

“China's P2P lending industry has become increasingly consolidated in the face of financial regulations that have imposed extra costs on those doing business in this realm. As smaller, less competitive firms are winnowed out, companies that are larger and more transparent have risen to the fore. These include Yirendai and Hexindai, both of which are listed on the NYSE and NASDAQ, respectively, and have taken pains to comply with regulations and to seek out higher quality borrowers.”

5. International – P2P

 

A feature in entrepreneur.com targets Indian SMEs, and suggest P2P is an ideal way of attaining funds for growth.

 

6. International – FinTech

 

FinTech Australia is out with a note on the push to achieve Open Banking rules – somewhat similar to what the UK kicked off this past January, according to Crowdfundinsider.

 

“The advocacy group responded to a submission by the Australian Banking Association that apparently wants to delay the inclusion of lending products in the first round of reform. FinTech Australia believes this will short change consumers – so why wait?

According to the group, the first phase of open banking should be designed to consumers get a better deal on mortgages and credit cards, as well as help overcome responsible lending problems highlighted in the Financial Services Royal Commission. Banks want this to be delayed.

FinTech Australia has been a persistent advocate of an open banking framework which empowers customers and drives Fintech innovation. The organization has formed a working group to help craft their message and perhaps guide Australia’s reformation of financial services data and how it is controlled. The working group says the first phase of Open Banking should include:

  • Both deposit and lending products (such as credit cards and mortgages)
  • A 12-month implementation timeframe
  • Personalised product information including interest rates and fees and charges applicable to each account
  • Small-to-medium sized business and joint accounts
  • A formal role for the Australian Competition and Consumer Commission to stop knee-jerk anti-competitive measures by banks.