News Briefing - Crowdfunding, SME And Alternative Finance

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1.UK – FinTech

P2P Finance News covered Money&Co.’s recent loan offer:

“Money&Co’s new loan for music publishing company Bsides Music, has proved popular with investors subscribing to 47 per cent of it in just two days.

The five-year loan, which is at eight per cent yield with A+ security, is to acquire a catalogue of music rights from a songwriter who specialises in Christian music.

The cost of the acquisition is £538,000 (including deal costs) and the company is contributing cash of £138,000 with a loan from Money&Co of £400,000 making up the balance.

The loan was added onto the platform on Saturday 28 March and the auction will close at 5pm on Tuesday 31 March.

“In a stay-at-home world where streaming music is more popular than ever, owning music rights has great attractions,” Money&Co said on a blog post on its website.

“We’ve opted for a slower rate of growth than many in the platform lending sector (facilitating some £20m in the past five years) – but our track record on security is consequently exceptional, with an annualised bad debt rate of just 0.03 per cent, far below the industry average.

“The overwhelming priority in today’s troubled world is clear: stay safe, and respect the rules on social distancing.

“If you’ve dealt with these massively important imperatives and have the time and inclination to look at your finances, we have a really interesting new loan with an excellent rating from our credit committee, and a business model that has a very low correlation with wildly oscillating global hare markets.”

Instead of its usual seven per cent annual gross rate of interest for an A plus rated deal, Money&Co has agreed to pay eight per cent because of the ongoing turmoil caused by the Covid-19 pandemic.”

 

2. UK – FinTech

 

AltFi reports:

 

“Since the world has entered this period of global lockdown many things have changed, including the most downloaded apps in the App Store.

Zoom, Houseparty and Microsoft Teams have all benefited from the surge, but so too have personal finance and share trading apps.

According to data from App Annie, average weekly app downloads for finance apps jumped 20 per cent in March compared to Q4 2019.

“This is expected, as banks advise consumers to access online banking where possible,” the mobile data and analytics group told AltFi.

In particular, PayPal, Monzo and Barclays Mobile Banking were the most downloaded finance apps in March 2020.”

 

3. UK – FinTech

Bond Review reports on the continued fallout from Dolphin Trust’s (German Property Group’s) problems:

“The CEO of the brokerage arm of Shinhan Financial Group, one of South Korea’s largest banks, has stepped down in an ongoing scandal partly involving the funnelling of investors’ money into Dolphin Trust (aka German Property Group).

Shinhan funnelled $306 million into Dolphin Trust via derivatives, according to The Korea Herald.

But the return on investment now looks bleak due to the repeated extension of maturity caused by the German authorities’ apparent reluctance to approve the project and other complications within between related parties.

Dolphin Trust first started defaulting on payments to investors in the latter half of 2018. In February it told investors that a buyout offer had been received but I’m not aware of any more recent news about this.

On 12 March Dolphin’s LSE-listed offshoot, Vordere plc, applied to de-list from the stock exchange. In a letter to shareholders it announced:

As Shareholders will be aware, trading in the Company shares has been suspended since 5th July 2019.  At that time, the Company had been seeking the necessary approval of the Financial Conduct Authority (“FCA”) to a Prospectus to enable the listing of the German Shares.  When your New Board was appointed it became apparent that your Company was a long way off agreeing the terms of an FCA approved Prospectus and, having investigated the matter in considerable detail, your New Board are now of the view that the prospects of securing an FCA approved Prospectus are highly unlikely and, therefore, consideration needed to be given to alternative strategies.”

 

4. UK – FinTech

 

The FCA promises help to customers of certain financial products affected by Covid-19.

The FCA proposals:

  • Set out the FCA’s expectations on firms to offer a temporary payment freeze on loans and credit cards where consumers face difficulties with their finances as a result of coronavirus, for up to three months.
  • Ensure that for customers who have been hit financially by the coronavirus and already have an arranged overdraft on their main personal current account, up to £500 will be charged at zero interest for up to three months.
  • Require firms to make sure that all overdraft customers are no worse off on price when compared to the prices they were charged before the recent overdraft changes came into force.
  • Ensure consumers using any of these temporary measures should not have their credit rating affected because of this.

 

 5. UK – FinTech

 

AltFi reports on the teething problems of the Cornavirus Business Interruption Loan scheme.

“The UK’s fintech lending industry can deploy substantial amounts of loans to small businesses to help shore up the economy, according to Rob Straathof, CEO of Liberis, who says the British Business Bank and the Government should urgently enlist their help.

Under plans drawn up by the Chancellor Rishi Sunak, the Government will guarantee up to 80 per cent of billions of pounds of loans made to small businesses via certain lending institutions in a bid to help struggling firms with cheap liquidity backed by the state.

Five of these lenders - including Aldemore Bank -  have temporarily withdrawn from the Coronavirus Business Interruption Loan Scheme, Bloomberg reported yesterday. Others including digital bank Tide says the scheme is available through too few lenders and the scheme itself is not fit for purpose during this crisis.

Among those approved for those CBILs, many of the best-known fintech lenders making a notable absence.”