Fintech business lenders sign code to lift transparency
Six fintech start-ups that lend to small business have signed a ”code of lending practice”, a move the small business ombudsman says will improve transparency and protect SMEs by requiring the online lenders to disclose standardised pricing and fairly resolve disputes. Prospa, which pulled an ASX float this month on concerns about its transparency, is a signatory to the code, along with Spotcap, Capify, GetCapital, Moula, OnDeck. They will be compliant by the end of the calendar year. The code will be enforced by an independent committee to be set up by the Australian Finance Industry Association. AFIA has helped write the code, alongside the Australian Small Business and Family […]
Fintechs tell Labor a credit report delay will entrench bank power
Labor’s push to delay a law requiring the major banks to put more customer data into credit reports will entrench the big four’s market dominance and keep the cost of personal loans unnecessarily high, five of the nation’s leading marketplace lenders have said. In a letter to shadow treasurer Chris Bowen, the CEOs of SocietyOne, RateSetter, MoneyPlace, Harmoney and WISR said a further delay to mandating big bank participation in the ‘comprehensive credit reporting’ (CCR) regime will “continue to entrench a fundamental competitive imbalance between the big four and other lenders”. The letter is a response to Mr Bowen’s move last week to call for a delay to CCR by […]
Put your money where your trust is
Why Nifty Personal Loans is the lender for you. In light of the recent fine laid down to the Commonwealth Bank of Australia for breaching anti-money laundering and counter terrorism laws, the credibility of Australian lenders has once again come under scrutiny. The massive $700 million settlement, the largest ever civil penalty in Australian corporate history, was agreed upon by CBA and the Australian Transaction Reports and Analysis Centre (AUSTRAC) earlier last week. It is said that CBA’s breach of anti-money laundering laws allowed large crime syndicates to launder funds through the bank’s ATM’s and Intelligent Deposit Machines (IDM’s). The bank and trusted lender failed to carry out appropriate assessment […]
Westpac ends Prospa deal as banks plan more unsecured SME lending
Westpac Banking Corp has ended its referral relationship with Prospa, a sign major banks are preparing to ramp up unsecured small business lending to try to regain some of the market that has been surrendered to start-ups. After Prospa indefinitely postponed its ASX listing last week amid questions on whether its loan contracts breached new laws, the online business lender faces more intense competition from big banks who are developing new products to lend more to small business without requiring residential property to be pledged as security. “We did not continue our contract with Prospa because we are working on developing our own products that will satisfy more of our […]
Ombudsman calls for greater clarity on fintech loan terms
Speaking to Mortgage Business, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Kate Carnell, stated her concern that fintechs, including Prospa, are making their interest rates “really hard to understand”. The small business lender, which postponed its public listing this week, reportedly has an average annual interest rate north of 40 per cent. However, while Ms Carnell did not suggest the interest rate was inappropriate, she did question the transparency around the actual rate itself. “If somebody wants to pay a 40 per cent [annual percentage rate], that’s absolutely fine,” Ms Carnell told Mortgage Business. “For particular sorts of loans that could have high levels of risk, that’s an […]
Prospa founders admit float lost ‘vital momentum’
The co-founders of small business lender Prospa maintain the company can return to the public markets for a future float, after a last-minute regulatory query this week created “confusion” that sapped the listing of vital “momentum.” Prospa was meant to be one of most-watched floats of 2018, but these plans were thrown into disarray this week as scrutiny from regulators apparently caught the company, and its investment bankers, off-guard. After Thursday night’s decision to postpone the float, on Friday, co-founders Greg Moshal and Beau Bortoli said Prospa was taking the opportunity to “regroup” and one day return to the public markets. Prospa had been due to list around lunchtime on […]
Fintech startup HashChing has launched an equity crowdfunding campaign
Mortgage marketplace startup HashChing, a fintech startup disrupting the monopoly of the big banks, has launched an equity crowdfunding campaign. It’s currently live on the Equitise platform, which has one of the seven crowdfunding licences issued for the first time this year. HashChing, which is seeking between $1 million and $5 million, has so far raised $286,500, at a minimum $250 investment, with another eight days to go. “A slight difference in interest rates can cost a homeowner thousands of dollar each year,” says Mandeep Sodhi, founder and CEO. “This is why one out of two Australians like to deal with a mortgage broker instead of going direct to the […]
Online lender Prospa delays float 30 minutes to listing
The sharemarket float of online lender Prospa has been postponed about half an hour before the planned listing, after the corporate watchdog wanted further details of its small business loan contracts. Prospa and its joint lead managers – investment banks UBS and Macquarie – said the 48-hour delay was because it was “seeking to clarify queries raised by ASIC yesterday in relation to Prospa’s small business loan terms,” as part of a wider review. “Prospa was first contacted yesterday by ASIC in relation to its industry-wide review of small business lending – bank and non-bank. The review covers a range of topics,” a Prospa spokeswoman said. “We take our legal […]
