News Briefing - Crowdfunding, SME And Alternative Finance

crowd at a concert

1.UK – FinTech

BTG Advisory, in a somewhat elliptical style, looks at opportunities for SMEs amid the virus crisis.

“The economic collapse in the UK is now the most severe downturn in 300 years, with activity forecast to plunge by around 30% in the first half of the year, according to the latest grim Bank of England estimates. Inevitably, comparisons are made with the global financial crisis (GFC) 12 years ago. But this time it is different – and in important ways – which provides the basis for a nuanced analysis for the opportunities that will emerge for resilient UK SMEs, and alternative lenders, post-pandemic.

In this article, we will consider the central differences between the GFC and now, and suggest how resilient UK SMEs should prepare themselves for the opportunities which we expect to emerge.”

 

2. UK – FinTech/Real Estate

Jan Večerka, the chief executive and founder of BrikkApp, opines on the effect of the Corona virus on the property market. Courtesy of Leicester Property Insight:

“Though the coronavirus’ effects on many sectors have been well documented by this point, its impact on the real estate investment market remains cloudy, with many predicting a slight downturn in the short-term.”

 

3. US - FinTech

“German fintech Raisin has launched its first product in the US, a ‘savings as a software service’ for American banks and credit unions. AltFi reports:

“Recently, Raisin has placed a high emphasis on targeting international markets, such as the North American market, through strategic acquisitions and banking partnerships.

The digital savings marketplace first made moves to jump across the pond in January of this year when it made its fourth major investment and acquired Choice Financial Solutions.

Raisin is hoping to roll out its savings as a software to help banks and credit unions to deliver services that currently only private banking customers have access to.

The software will enable banks to give users customised deposit products which will be protected by the Federal Deposit Insurance Corporation up to $250,000.”

4. International – AltFi

Crowdfund Insider reports:

“Eurozone savers deposited €43 billion in March 2020, marking the eighth month where net inflows exceeded 40 billion euros since February 2019, according to a report by Hamburg, Germany based Fintech and open banking platform Deposit Solutions.

The company’s research indicates that French savers deposited the most into their accounts in March 2020, (€19 billion), followed by Italian savers (€17 billion), and Spanish savers (€10 billion).  Deposit Solutions states that a total of €7,800 billion is currently deposited in eurozone banks, of which €750 billion has been added in the past two years.

According to the report, German banks hold the most customer deposits in the Eurozone, as the largest EU economy should come as no surprise. Approximately €2,400 billion was in savings but in March 2020, Germany was one of the few eurozone countries where people held less money in their accounts than the previous month – a decrease of €10 billion or 0.4 percent.

Deposit Solutions said this phenomenon was similar to 2008 following the demise of Lehman when German savers pulled cash out or o.4 percent (€6 billion). At that time, in the following three months Germans transferred many times this amount (€70 billion) back into their accounts.

In other eurozone countries, however, there are differences between 2008 and 2020. In September 2008, there were also cash outflows from deposit accounts in the Netherlands, France, and Spain. In March 2020, however, all three countries were among the largest net contributors.

The report states that the COVID-19 crisis, as indicated in March 2020, is not a repetition.

Net deposits into deposit accounts fell steadily in the months before September 2008 and reached their lowest point with the Lehman bankruptcy. In 2020 during the Coronavirus pandemic, deposit growth has remained stable both before the crisis and at the time of its outbreak.”

5. International – FinTech

News of a new P2P platform in India comes via The Paypers.

“India-based fintech 5paisa.com has launched its peer-to-peer lending platform, where one can lend from EUR 6 to EUR 61 million to multiple borrowers.

 

The platform is a registered NBFC with the Reserve Bank of India, which offers peer-to-peer lending solution with an aim to solve short-term cash requirements of borrowers from all walks of life.

According to Economic Times, 5paisa Loans screens every borrower coming on its platform with more than 100 variable data points like age, location, earnings, previous loan history, social profile, expenditure, among others and presents the information through a unified score for lenders to choose from.

Therefore, rather than lending to an individual borrower, the platform enables lending to a portfolio of borrowers, thereby, reducing risk and diversifying investment.”