News Briefing - Crowdfunding, SME And Alternative Finance

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The essentials are here and will be regularly updated. If you want to be well-informed about the investment crowdfunding scene, and you're short of time, this is the place to visit.

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1. UK – P2P

The UK Financial Conduct Authority (FCA) released its review of the crowdfunding industry regulations last Friday. Crowdfundinsider reports.

“While the investment crowdfunding sector (equity crowdfunding) came away mostly unscathed the loan based sector (or peer to peer lending) took a bit of a lashing.

The FCA said the peer to peer lending had become “increasingly complex” and sited occurrences of operations that lacked transparency and instances where interest rates were not matched with the appropriate level of risk. The FCA subsequently announced a new consultation as it looks to firm up compliance for UK online lenders. Gillian Roche-Saunders, a partner at the law firm of Bates, Wells & Braithwaite – and Fintech expert, said this will be “the foundation of a much more sophisticated and targeted supervisory approach from the regulator.“

2. UK – SMEs

 

The majority of small companies would vote to stay in the European Union if there were to be a re-run of the Brexit referendum, a survey highlighted by The Times shows.

“A poll of 965 small businesses found that 56 per cent now want to stay in the EU and 32 per cent wish to leave. The remainder were undecided or declined to state their preference.

The survey, which was conducted by Funding Circle, a peer-to-peer lending platform, highlighted a 7 per cent swing towards remaining since April last year.”

3. US – P2P

 

Online lender Prosper announced a new milestone last week, according to Crowdfundinsider.

The marketplace lending platform topped one million loans representing over $13 billion in originations.

Milestone: Marketplace Lender Prosper Tops One Million Loans  

4. US – AltFi

The US Chamber of Commerce has called for financial innovation:

“The Chamber held an event in DC and published a document outlining their thoughts. The policy paper included a list of guiding principles for the group. They are as follows:

  1. Encourage safe innovation in the financial sector, whether by a new entrant, traditional financial institution, or by a joint initiative by both.
  2. Streamline the fragmented regulatory structure so any financial service provider that serves a national, multi-state market has one set of rules to abide by, instead of the complex state rules and multiple federal agencies.
  3. Foster partnerships between new entrants and incumbent financial institutions, while minimizing the burden of “vendor management” requirements.
  4. Support policies that promote expanded financial access to affordable and accessible credit for underserved communities for both households and small businesses.
  5. Enrich financial literacy through multiple platforms to reach the consumers, investors, and small business owners who need it most.
  6. Educate policymakers about the benefits of financial innovation and the opportunities to serve the consumers and small business owners who may not have affordable access to credit.
  7. Protect consumer privacy, create best practices for cybersecurity protections, and develop safe ways for consumers to manage their digital identity.

Promote new and innovative ways to access capital, such as initial coin offerings (ICOs), while advocating for tailored oversight and strong consumer and investor protections.”

 

Full story on Crowdfund Insider:
US Chamber of Commerce Adds its Voice to Promoting Fintech Innovation



 5. International – P2P

Government-controlled China Daily says P2P needs stricter supervision.

 

“IN THE FIRST half of this month, 71 peer-to-peer online lending platforms have closed down and some of the business owners have fled. The unprecedented wave of P2P lending collapses is causing panic in the entire industry. Guangming Daily comments:

Peer-to-peer lending, which used to be eulogized as an innovative, flexible and convenient financing tool, witnessed a robust increase in 2015, when its transaction volume exceeded 1 trillion yuan ($147.5 billion), nearly triple the amount of the previous year.

The financial administrative department's loose supervision, if not noninterference, facilitated the industry's rapid growth, because the regulators wished to make it into a financing tool to help small and micro enterprises, to which banks are reluctant to lend.”