News Briefing - Crowdfunding, SME And Alternative Finance

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1.UK – P2P

P2P Finance News reports a high-street bank launch:

 

“HIGH street bank NatWest is taking on digital lenders with the launch of a new working capital product.

Rapid Cash offers credit of up to £300,000 based on customers’ unpaid invoices, competing with the likes of MarketInvoice and Growth Street.”

 

2. UK – P2P

 

Crowdfund Insider looks at Funding Circle’s fourth loan securitisation.

 

“Online lending platform Funding Circle has announced week it completed its fourth securitization of funding. According to Funding Circle, the £232 million transaction is considered the largest ever securitization facilitated through its platform.

“The transaction was rated by two rating agencies, and its senior tranche was awarded an Aa3 / AA ratings by Moody’s and S&P respectively. On closing, the spread over 1-month Libor on the senior tranche was 120 basis points.  The securitization forms part of Waterfall Asset Management’s £1 billion investment in Funding Circle loans announced at the end of last year. This commitment will support the growth of approximately 14,000 small businesses*, creating and sustaining thousands of new jobs across the UK.”

Funding Circle also reported that the £232 million deal is further recognition of the online lending model’s ability to open up deep pools of capital to small businesses, creating more choice and competition in the small business lending market.”

3. UK – P2P

 

P2P Finance News reports a fund launch:

 

“FUNDING Circle has launched its first euro-denominated fund, providing institutional investors with the opportunity to fund German and Dutch small- and medium-sized enterprise (SME) loans.

The publicly-listed peer-to-peer business lender is aiming to raise at least €200m (£179m) for the fund over the next 18 months. Two Finnish insurance companies and Funding Circle have together committed an initial €40m.

The Funding Circle European SME Direct Lending Fund I will target institutional investors such as pension funds and insurance companies for investment in a portfolio of SME loans in Germany and the Netherlands.

It is similar to a UK-focused fund that Funding Circle launched in June and will also target annual returns of between 5.5 per cent and 6.5 per cent for investors.

The new European vehicle has an eight-year, closed-ended structure and is Funding Circle’s first vehicle to be denominated in euros.”


4. UK – P2P

 

More on the new FCA guidelines on P2P  from Lexology.

 

“The FCA has published its policy statement on peer-to-peer (P2P) lending following a lengthy public consultation into the crowdfunding industry in general. The policy statement introduces a large number of new rules for P2P platforms and includes restrictions on direct marketing to non-sophisticated / high net worth investors unless they are receiving regulated advice, and ensuring such investors do not place more than 10% of their investable capital in P2P platforms.

P2P lending is one of the financial sector's great unknowns. Whilst its popularity has increased exponentially in recent years, (the FCA estimates that 275,000 people have funds in P2P lending platforms, totalling more than £5bn across 68 providers) regulation, until now, has been sparse. In an attempt to provide clarity, the FCA has announced a series of new rules which will mostly come into force later this year.

The aims of the rules are to ensure investors have clear and accurate information about the investment risk of a product, to allow them to make suitable investment choices and to understand that their capital is at risk and they may suffer losses.

In summary the following key rules will be implemented:

  • Marketing restrictions will be applied in an attempt to protect unsophisticated investors.
  • Appropriateness assessments will be introduced when no advice has been given to the investor.
  • The Mortgage and Home Finance Conduct of Business sourcebook (MCOB) and other Handbook requirements will now be applicable to P2P platforms that offer home finance products, where at least one of the investors is not an authorised home finance provider.”


 

5. UK – AltFi

 

More on the LCF affair, from The Times.

Two sets of administrators are locked in a financial dispute that has arisen from the London Capital & Finance scandal. It follows the collapse in January of London Capital & Finance, 

6. International – FinTech

Cryptocurrency Guide reports on China’s concern about Libra, the Facebook token.

“Facebook’s plans to create its own cryptocurrency have forced China’s central bank into stepping up research into creating its own digital currency as Libra could potentially pose a challenge to Chinese cross-border payments, monetary policy and even financial sovereignty, a People’s Bank of China official said on Monday.

If [Libra] is widely used for payments, cross-border payments in particular, would it be able to function like money and accordingly have a large influence on monetary policy, financial stability and the international monetary system?” asked Wang Xin, director of the People’s Bank of China (PBOC)’s research bureau during an academic conference hosted by Peking University’s Institute of Digital Finance.”