Online lending – Forum Della Magia http://forumdellamagia.org/ Mon, 26 Sep 2022 13:57:16 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://forumdellamagia.org/wp-content/uploads/2021/04/cropped-icon-32x32.png Online lending – Forum Della Magia http://forumdellamagia.org/ 32 32 Ghana will not default on loan repayments despite Fitch demotion – US-based Associate Professor https://forumdellamagia.org/ghana-will-not-default-on-loan-repayments-despite-fitch-demotion-us-based-associate-professor/ Mon, 26 Sep 2022 13:57:16 +0000 https://forumdellamagia.org/ghana-will-not-default-on-loan-repayments-despite-fitch-demotion-us-based-associate-professor/ Dr Williams Peprah

Financial expert Dr Williams Peprah has said the government will not default on its loan repayments despite the country’s credit rating being downgraded to deeper junk status by ratings agency Fitch.

Fitch’s said its decision on Ghana reflects soaring interest costs on domestic debt, a prolonged lack of access to Eurobond markets and the increased likelihood that Ghana will pursue debt restructuring given the growing financial stress.

Speaking to Joy Business, Dr Peprah, an associate professor at Andrews University in Michigan, US, said the government needed to act decisively, however, to reduce additional pressures on the economy.

He therefore wants the government to drastically reduce its expenditure, both current and capital, in order to settle its interest payments quickly.

“We can mention that, in terms of ability to pay, Ghana is in a position [to repay]. Regarding the character of Ghana, when we do the credit analysis, we have not defaulted on any of our loans. This therefore gives a signal that the likelihood of Ghana being in default character is not very imminent”.

“Regarding the conditions, we know that Ghana hopes to meet all the conditions. Indeed, this is why Ghana is pursuing an International Monetary Fund (IMF) program to be able to give a bailout in terms of liquidity support so that Ghana can find its feet”.

IMF program to calm financial markets

Dr Peprah hopes that an IMF program will be launched by the first quarter of 2023 to calm financial markets and restore the economy.

“We hope this [IMF programme] should be detached in the first quarter of 2023; some funds will come from the IMF to help the economy recover. But more importantly, if this rating is alarming and worrisome, we may have to hope that we can turn the tide by being disciplined with our spending in the country.”

He, however, stressed that the upgrade of Ghana’s credit rating from ‘CCC’ to ‘CC’ was expected, although all is not lost.

“The ratings given by Fitch that place Ghana’s long-term monetary debt at junk status are very alarming, but they were anticipated. However, if you look at the analysis of how to determine Ghana’s creditworthiness, all is not lost.

“We admit that the ability to pay with regard to our debt ratio has increased but it is not too alarming,” he added.

He alluded to the fact that there is a high likelihood that the government intends to come up with strategies that would increase revenue collection, “but what we really expect from the government right now is to reduce its expenditure both in capital and in current expenditure considerably to make room for certain funds to be able to settle the loans that the government has contracted”.

Fitch downgrades Ghana to ‘trash’ status

Rating agency Fitch on Friday, September 23, 2022, downgraded Ghana’s default local and foreign long-term (IDR) issuer ratings to “CC” or undesirable status.

This is the second time in 2022 that it downgrades Ghana’s creditworthiness.

It also comes two days after President Akufo-Addo slammed rating agencies at a United Nations conference for unfairly rating and rating African countries at a time when the global economy was going through tough times.

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CFPB study highlights need for “Buy Now, Pay Later” rules https://forumdellamagia.org/cfpb-study-highlights-need-for-buy-now-pay-later-rules/ Fri, 23 Sep 2022 19:04:05 +0000 https://forumdellamagia.org/cfpb-study-highlights-need-for-buy-now-pay-later-rules/

The Consumer Financial Protection Bureau (CFPB) is preparing to put in place the same type of strict protections that it places on credit card companies in the “Buy now, pay later” (BNPL) sector, following the publication of a recent study on the practice. Officials said their findings revealed a booming industry that not only had few safeguards for consumers and helped normalize debt, but had also begun data collection and monetization efforts with little support. surveillance.

“Buy now, pay later is a rapidly growing type of loan that is closely replacing credit cards,” CFPB Director Rohit Chopra said last Thursday. “We will work to ensure borrowers have similar protections whether they are using a credit card or a Buy Now, Pay Later loan.”

Key points to remember

  • Buy now, pay later is an interest-free payment option that primarily allows you to pay for goods and services online.
  • The option has grown significantly during the pandemic, with Affirm, Afterpay, Klarna, PayPal and Zip originating 180 million Buy Now, Pay Later loans totaling more than $24 billion last year.
  • A Buy Now, Pay Later industry study found that consumer protections are lax and lenders often use data collection to create a database of valuable personal information.
  • The Consumer Financial Protection Bureau sets rules and guidelines to protect consumers from potential dangers such as rampant data collection.

Buy now, pay later is a booming industry

With such an emphasis on online retail in recent years, some companies and lenders have started promoting their BNPL products. Whether called “pay in four”, “split payment” or BNPL, the concept is the same: they were point-of-sale interest-free installment loans that allowed consumers to pay for their purchases over time. . In most cases, a down payment is required with plans typically capped at around $1,000. Any late or missing payment will incur additional charges.

According to the CFPB report, BNPL has grown in popularity so quickly that the top five lenders, Affirm, Afterpay, Klarna, PayPal and Zip, were responsible for 180 million loans totaling $24.2 billion in 2021. Those numbers eclipsed data from 2019, which saw these same lenders disbursed 16.8 million loans worth $2 billion in 2019.

Consumers face certain risks by buying now, paying later

Although the absence of interest payments and staggered repayment plans may be attractive to most consumers, CFPB researchers found that BNPL loans were associated with some potentially dangerous risks.

  • Lack of standardized consumer protections. The CFPB’s main concern is the apparent lack of consistent oversight and consumer protection. Because lenders operate outside the confines of credit card regulations, some consumers may find themselves vulnerable to things like a “lack of standardized cost of credit disclosures, minimal dispute resolution rights, a forced opt-in to automatic payment and businesses that assess multiple late penalties on the same missed payment.”
  • Younger access to debt. The researchers found that among the top five lender users, the average borrower who sought to use BNPL tended to be younger. According to the data, young millennials (25-33 years old) made up the largest cohort, with older generations (34-40 years old) and Gen Z (18-24 years old) taking second and third place.
  • Normalizes debt. By getting young people into debt earlier, this risks normalizing the accumulation of debt without proper management. The ease of getting a BNPL loan is evidenced by the fact that loan approval rates have increased from 69% in 2020 to 73% in 2021 and the prevalence of late fees has increased from 7, 8% to 10.5% over the same period.
  • Lenders have started turning to collecting and selling user data. Even as BNPL plans have grown in popularity, researchers found that profit margins had started to shrink, from 1.27% in 2020 to 1.01% of the total loan amount issued. With yields falling, the CFPB said it learned that some lenders were building a “valuable digital profile of each user’s shopping preferences and behavior” by turning to proprietary apps.

How the CFPB reacts

Even though BNPL providers fall under the jurisdiction of some state and federal oversight, the CFPB uses its power over credit providers and “has the power to supervise any non-custodial covered person, such as a Buy Now, Pay Later provider. , in certain circumstances .”

To that end, the CFPB said it will begin to identify areas where it can provide guidance and establish rules to ensure BNPL lenders “adhere to many of the basic protections that Congress has already established for credit cards” and will be subject to regular inspections. Regarding the risk of borrowers taking on too many BNPL loans, the office will consider how lenders can begin to follow accurate credit reporting practices. Regarding the issue of data collection, the CFPB will find and call out data collection practices that lenders should avoid.

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Why are the government and regulators worried about the rise of fintech? https://forumdellamagia.org/why-are-the-government-and-regulators-worried-about-the-rise-of-fintech/ Thu, 22 Sep 2022 01:30:00 +0000 https://forumdellamagia.org/why-are-the-government-and-regulators-worried-about-the-rise-of-fintech/

Taking note of a slew of complaints, the Reserve Bank of India had released the first stage of digital lending standards in August. It only allowed loan disbursements by entities regulated by the banking regulator.

The government recently launched a crackdown on several illegal loan apps that exploited gullible customers, charged high interest rates and issued threats. Some of them are said to have ties to China.

Earlier this month, Union Finance Minister Nirmala Sitharaman asked RBI to prepare a “whitelist” of digital lending apps to weed out illegal apps.

And those concerns were echoed at the Global Fintech Fest on Tuesday when Prime Minister Narendra Modi said the fintech industry needed to work hard on security and reliability.

At the same event and on the same day, Finance Minister Sitharaman said work was underway to implement common knowledge of your customer, or KYC, which could be used for a variety of transactions between institutions.

RBI Governor Shaktikanta Das also added his voice to the conversation, saying Big Tech’s growing involvement in the financial system could lead to concentration risk. According to Das, potential risks regarding competition, market and business conduct, data privacy, cybersecurity and financial stability needed to be looked at more closely.

His remarks come at a time when Big Tech companies like Google, Amazon and WhatsApp are already deeply involved in the country’s payment ecosystem. The government’s concerns were also explained when Das said the growth of digital loans during the pandemic had raised concerns, as evidenced by a series of complaints about usurious interest rates, unethical recovery practices and data privacy.

A day after these statements, the government’s concerns were further elaborated by the chairman of the Securities and Exchange Board of India, Madhabi Puri Buch. Once again at the Global Fintech Fest, Buch said SEBI is looking to fill the regulatory void in the startup ecosystem.

She also revealed what fintech companies should keep in mind to avoid a crackdown. First, anonymity in the financial world would be an absolute no-no. Second, transparency would be essential. Buch warned that if a business model, including things like the algorithm used, was not susceptible to auditing or validation, it would not be allowed. And third, the SEBI chief stressed that business models that did not provide an easy exit for customers would not be supported.

Under the new RBI rules, which come into effect from December, lenders must inform borrowers of all fees, charges and annual percentage rate in a standardized format. And there can be no automatic increase in credit limit without the express consent of the borrower.

The guidelines also require that data collected by lending applications be needs-based and taken with the borrower’s prior consent. Banks and their associated loan service providers must also appoint a nodal grievance officer to handle complaints. Other reporting requirements are also part of the guidelines.

Authorities have good reason to be concerned. According to the government, India has the highest fintech adoption rate in the world at 87%, which is significantly higher than the global average rate of 64%.

Fintech firms are also expected to have $1 trillion in assets under management by 2030. In 2021, India’s real-time transactions exceeded 48 billion, or 6.5 times the combined volume of the United States, from Canada, the United Kingdom, France and Germany. Until then, it was the largest absolute number of real-time transactions in the world. Additionally, the country’s digital payments market is expected to more than triple to $10 trillion by 2026 from $3 trillion currently. As a result, by value, two out of three transactions in India will be digital by 2026.

So where are we now and what steps should stakeholders take to improve the situation?

Srinath Sridharan, business adviser and independent market commentator, says RBI, SEBI and IRDA have access to the systems, processes and balance sheets of the companies they regulate. Many fintechs are not regulated by the RBI, but apparently in the lending and shadow lending business. Without regulation, these businesses can become a social issue. RBI may have concerns about EMIs in the unregulated fintech space. RBI does not want India to be deeply indebted.

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Martin Dubravka praises ‘pleasant’ Cristiano Ronaldo for welcoming Manchester United after loan spell https://forumdellamagia.org/martin-dubravka-praises-pleasant-cristiano-ronaldo-for-welcoming-manchester-united-after-loan-spell/ Mon, 19 Sep 2022 23:43:37 +0000 https://forumdellamagia.org/martin-dubravka-praises-pleasant-cristiano-ronaldo-for-welcoming-manchester-united-after-loan-spell/

Martin Dubravka praises ‘pleasant’ Cristiano Ronaldo for hosting Man United after his loan move from Newcastle, saying he ‘didn’t want to look like a fan’ as the striker was ‘showing love’ ‘interest’ in his life

  • Martin Dubravka praised Cristiano Ronaldo for his welcome to Man United
  • Dubravka signed for the Red Devils on loan from Newcastle in the summer
  • The goalkeeper said Ronaldo was nice and interested in his life
  • Ronaldo had already indicated his intention to leave United this summer

Manchester United goalkeeper Martin Dubravka has praised Cristiano Ronaldo for his welcome on the Slovak’s transfer to the club.

Dubravka joined United on loan from Newcastle in the summer transfer window and has since acted as a substitute for David De Gea.

Talk to sport Going through ChronicLiveDubravka said it was “nice” to speak to the five-time Ballon D’Or winner, who looked into his life after his transfer.

Martin Dubravka praised Cristiano Ronaldo for his welcome to Manchester United

Slovak Dubravka said Ronaldo was pleasant to talk to and showed keen interest in his life

Slovak Dubravka said Ronaldo was pleasant to talk to and showed keen interest in his life

“We had the opportunity to talk to each other before training and then after training in the gym,” Dubravka said.

“He asked me about my family, if I was staying in a hotel now and the usual things.

“He showed an interest in communication and he started first. I didn’t want to sound like a fan and go straight to him, but it was very nice to talk to him about anything.

“I’ve probably had the most communication with him all day, other than Scott McTominay and Tom Heaton, who are right next to me in the locker room, of course.”

Dubravka, now 33, joined Erik ten Hag's side on loan from Newcastle in the summer

Dubravka, now 33, joined Erik ten Hag’s side on loan from Newcastle in the summer

Ronaldo attempted to leave Manchester United in the summer in search of Champions League football but failed to walk away from the club.

The 37-year-old has started United’s last two games following an injury to Marcus Rashford, and manager Erik ten Hag is apparently trying to get Ronaldo back into his plans.

It has been suggested that former Chelsea boss Thomas Tuchel refused to sign Ronaldo because he would disrupt dressing room morale, a feat several reports claimed Ronaldo was guilty of.

But the striker looks happier at United after the team’s return to form, with the Red Devils now fifth in the Premier League and Ronaldo set for a run in the squad.

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Should I buy a car now or wait? https://forumdellamagia.org/should-i-buy-a-car-now-or-wait/ Sat, 17 Sep 2022 16:32:17 +0000 https://forumdellamagia.org/should-i-buy-a-car-now-or-wait/

Buying a car continues to be a challenge amid record inflation, a shortage of support and rising interest rates. Since the start of the Covid-19 pandemic, prices for new and used cars have risen dramatically, leaving buyers with limited choice when it comes to finding affordable vehicles.

According Kelley’s Blue Book, the average price of a new car hit an all-time high of $48,301 in August, up nearly 11% from a year ago. And with another Federal Reserve interest rate hike set to hit soon, a new car is quickly becoming a luxury few Americans can afford.

That said, there are still signs of hope for those looking to buy an affordable vehicle this year. Below, Select takes a closer look at how consumers can find the best deals without spending more than their budget allows.

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How to strategically buy a car in 2022

Of course, the real question is: should you buy a car now or wait until 2023?

Zach Shefska, co-founder and CEO of YAAa car buyer advocacy website, says you should wait to buy a car because prices will stay high due to low inventory.

According a recent report from Cox Automotive, the number of new and unsold vehicles available remained stable at 1.09 million. While this is technically a small improvement on the 1.07 million vehicles available last year, the numbers are still a far cry from where they were before the pandemic, when there were easily 2.55 million vehicles available in July 2020 or 3.69 million vehicles available in July 2019. .

Unfortunately, Shefska says it’s going to be a long time before manufacturers can recoup that number, but there are a few ways to give yourself a little edge when buying your next vehicle if you just can’t wait any longer.

Track car prices aggressively before you buy

First, Shefska recommends doing thorough research on the car you like and looking for other similar vehicles recently sold in your area. The more research you do, the more confident you will feel when you walk into a dealership. You can find free tools to do this on websites such as YAA, CarGurus and Cars.com.

If a dealer pushes back the desired price, mention the research you’ve done on other local, comparable deals. If they keep rushing you and giving you no wiggle room, consider taking the same search to another dealer and trying again there.

Buyers have leverage for some used vehicles

Shefska also says used car prices have fallen since the start of the summer and could continue to fall. This is because wholesale prices have come down, clearing the way for dealers to lower their prices as well. That said, there was a small spike in mid-summer, which brought the average used car price to just over $28,000 in July 2022.

Kelley’s Blue Book says real savings can be made when buying larger vehicles such as SUVs and pickup trucks, as consumers have shifted away from less efficient vehicles amid recent spikes in gas prices . Savings on small compact cars, meanwhile, can be harder to come by.

According to Shefska, if you’re looking for a used vehicle, consumers are in the driver’s seat. He strongly recommends buyers track down vehicles that have been sitting in the lot for more than 60 days – the longer the car sits there, the more incentive the dealership has to sell it.

Show up at the dealership with financing or cash in hand

It is well known that car dealerships make big profits by linking their cars to loans on their premises. Walking into a dealership with financing from your local bank or credit union — or cash on hand — will give you much more leverage to negotiate the car’s price down.

To find an auto loan in your area, you should first check to see if your own bank or credit union offers them. It’s also best to shop around online to find a lender with the best available interest rate and repayment terms that work for you.

If you have good to excellent credit, consider working with one of the following lenders for your car loan, as they all offer a reasonable APR or annual percentage rate:

Select has detailed the pros and cons of using a personal loan over an auto loan when buying a car. You can check out Select’s personal loan marketplace to compare loans and find the one with the best rates and terms for you.

Before applying for a new car loan, check your credit score to see if you might qualify for a low-interest loan. You can also check and monitor your credit score with one of the following credit monitoring services:

Chase Credit Journey

  • Cost

  • Credit bureaus monitored

  • Credit score model used

  • Dark web analysis

  • Identity theft insurance

Capital One CreditWise®

Information on CreditWise was collected independently by Select and was not reviewed or provided by Capital One prior to publication.

  • Cost

  • Credit bureaus monitored

  • Credit score model used

  • Dark web analysis

  • Identity insurance

American Express® MyCredit Guide

  • Cost

  • Credit bureaus monitored

  • Credit score model used

  • Dark web analysis

  • Identity theft insurance

Advantages

  • Score Goals lets you set a desired credit score and get personalized recommendations on the best ways to improve it
  • Has a credit score simulator

The inconvenients

  • Monitors only one credit bureau report
  • No dark web analysis
  • Does not offer identity theft insurance

Finally, if you plan to buy a car with cash, it might be a good idea to put your money in a high-yield savings account, which offers an above-average APY, so you can put your money to work for a bit. faster. Select ranked these accounts among the best:

LendingClub High Yield Savings

LendingClub Bank, NA, Member FDIC

  • Annual Percentage Yield (APY)

  • The minimum balance

    No minimum balance required after $100.00 to open the account

  • Monthly fee

  • Maximum transactions

  • Excessive transaction fees

  • Overdraft fees

  • Offer a current account?

  • Offer an ATM card?

Marcus by Goldman Sachs High Yield Online Savings

Goldman Sachs Bank USA is a member of the FDIC.

  • Annual Percentage Yield (APY)

  • The minimum balance

    None to open; $1 to earn interest

  • Monthly fee

  • Maximum transactions

    Up to 6 free withdrawals or transfers per statement cycle *Cycle withdrawal limit of 6/instructions is waived during the Coronavirus outbreak under Regulation D

  • Excessive transaction fees

  • Overdraft fees

  • Offer a current account?

  • Offer an ATM card?

At the end of the line

As long as the car market continues its slow recovery, prices will still be strongly inflated. As a result, Shefska says if you don’t absolutely need to buy a car right now, it’s probably best to wait.

In the meantime, consider using public transport more or getting around via ride-sharing services if your budget allows. If you have to buy a vehicle this year, check your credit score and bank account first to see what you can afford without neglecting any other financial responsibilities.

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff alone and have not been reviewed, endorsed or otherwise endorsed by any third party.

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Best Growth Stock Today: Upstart or Shopify? https://forumdellamagia.org/best-growth-stock-today-upstart-or-shopify/ Fri, 16 Sep 2022 11:00:00 +0000 https://forumdellamagia.org/best-growth-stock-today-upstart-or-shopify/

Growth stocks have been on a rollercoaster ride in 2022 after enjoying massive gains from pandemic lows in March 2020 through the end of last year. This should come as no surprise given that macroeconomic conditions have deteriorated given high inflation, rising borrowing costs and geopolitical concerns related to the war in Ukraine. When economic conditions deteriorate, investors tend to exit positions in high-growth stocks, as many of them have high valuation multiples and no track record of profitability.

two companies, Shopify (STORE 0.47%) and Reached (UPST 2.57%), are in particular trouble right now. Not only are they affected by macro conditions, but they are also going through transitional phases right now. Although the timing was unfortunate, both companies still enjoy long avenues for growth in the years to come. On that note, which of the two stocks, if any, should investors consider buying today?

Image source: Getty Images.

Where is Shopify today?

Shares of e-commerce software titan Shopify have crashed 75% year-to-date. Besides the broader macroeconomic landscape, what is causing its stock price to fall so sharply? In the second quarter, the company’s total revenue increased 15.7% year-over-year to $1.3 billion. As its revenue growth slowed, the losses continued to pile up. In the second quarter, the e-commerce business suffered a net loss of $1.2 billion, bringing its total first-half loss to $2.68 billion. For context, in the first half of last year, the company generated a positive profit of $2.29 billion.

So what is this massive change? If you take a look at Shopify’s income statement, you’ll quickly notice that its operating expenses skyrocketed in the second quarter. The company’s total operating expenses rose 76% year-over-year to $845.9 million, or 65% of total revenue, from 43% a year earlier. The e-commerce platform is investing aggressively in its Shopify fulfillment network, which aims to provide Shopify merchant customers with faster and more efficient shipping.

This is a capital-intensive move, and while it will put pressure on Shopify’s bottom line for some time, the company looks well-positioned to weather the storm. He currently has $7 billion in cash and marketable securities, and a low leverage ratio of 14%. Thus, I am confident that Shopify has what it takes to deal with the current situation.

And what about Upstart?

Similar to Shopify, artificial intelligence (AI) lending platform Upstart has seen its stock price plummet 83% year-to-date. In the second quarter, its total revenue climbed 17.6% year-over-year to $228.2 million, while its net profit ended in the red at $29.9 million. dollars. Reasonably, many investors were concerned about how Upstart’s AI lending model would respond to the darkening economic backdrop. Fortunately, additional data provided by the company during its second quarter earnings call suggests that its model has remained accurate despite changing economic conditions.

Although the company has seen an increase in delinquencies, consistent with industry-wide trends, it has found that its lending model is five times more accurate than FICO in distinguishing borrowers from low risk from those at high risk. So, it looks like his lending model is working very well in a bear market – a fantastic signal for long-term investors. However, Upstart is going through its own transition. Because economic conditions deteriorated, the company ran into a problem where many of its lending partners suspended or reduced loan disbursements.

As a result, the company is temporarily leveraging its balance sheet to ensure consumers can receive appropriate financing until it can design a permanent plan that ensures lending partners will invest continuously through economic cycles. . While I understand if investors are worried, it’s important to keep a long-term mindset as Upstart’s current transition is short-term. Not to mention, it has $914.4 million of cash and restricted cash on its balance sheet, so it seems well positioned to handle the transition.

What stock should you buy?

There’s no doubt about it – both companies have huge total addressable markets. According to management, Upstart has a $6 trillion opportunity in the loan origination market. Statista estimates that online retail sales will grow 50% over the next four years, to $7.4 trillion, good news for Shopify. Today, Shopify and Upstart have price-to-sale multiples of 8.5 and 2.2, respectively. Although both companies have a bright future, I think Upstart is the smartest investment today. Given its huge market opportunity, relatively small valuation, and outpacing Shopify in recent quarters, it seems like the best buy right now.

Luc Meindl has no position in the stocks mentioned. The Motley Fool has positions and recommends Shopify and Upstart Holdings, Inc. The Motley Fool recommends the following options: $1,140 January 2023 Long Calls on Shopify and $1,160 January 2023 Short Calls on Shopify. The Motley Fool has a disclosure policy.

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Account aggregation framework can help streamline complex lending processes https://forumdellamagia.org/account-aggregation-framework-can-help-streamline-complex-lending-processes/ Wed, 14 Sep 2022 08:36:38 +0000 https://forumdellamagia.org/account-aggregation-framework-can-help-streamline-complex-lending-processes/

Access to credit has always been a big problem in India. Although banks and non-bank financial companies (NBFCs) have increased their presence in Tier 2/3 markets and beyond over the decade, it has only recently become possible to percolate access to products financial services to consumers with little or no credit history. In the absence of reliable data, lenders assume higher risk and therefore resort to higher interest rates and higher processing fees and charges, making it difficult to meet the need for credit among low-income segments. To help make available reliable data for Reserve Bank of India (RBI) valuation and underwriting, investments and promotion under Account Aggregator (AA) to democratize credit by bridging the gap between financial service providers and the millions of Indian borrowers, is a positive step forward.

Through AA data channels, account aggregators can transform the ingrained lending practices of financial institutions by opening up access to borrowers’ financial information for a nominal fee. The biggest banks and fintechs in India have already started offering loans leveraging the account aggregation framework, thereby speeding up loan disbursements and lowering the cost of credit.

How do account aggregators work?

The Account Aggregator (AA) framework is heralded as a game-changer for opening up access to data, ranging from financial to alternative data. In this context, customers are the true owners of their data. So they try to avail various financial products and services. the request for consent to access their data comes from Financial Information Users (FIUs) such as lenders, wealth managers, etc., for data hosted at Financial Information Providers (FIPs), which are generally banks, asset management companies, insurers, etc. The Account Aggregator (AA) acts as a consent manager for financial data, which maintains the record of consent given by customers and functions as a platform for transparent sharing of data. After consent requests are received, the consent data shared by FIP is encrypted and sent to CRF. This data is then deciphered by the CRF for agreed use cases (with the client) such as cash flow based lending, credit risk monitoring, personalized wealth management, loyalty management, And much more.

As the consent control is in the hands of the customers, they know the purpose (use case), the duration – the data is accessible for how many years and the age of the data – whether it is one-month or six-month bank statement data, which they have agreed to share with the FIU. This reduces friction in data collection and threats of data misuse, and simplifies data sharing procedures. Additionally, users may revoke consent at a later date at their convenience by contacting the AA directly.

Account aggregators as enablers to streamline complex lending processes

Several factors govern the availability of credit for a borrower, and having a credit history is one of the most important. It can be difficult for new borrowers with little or no credit history to obtain affordable and easy loans from banks and NBFCs. Additionally, those with fluctuating incomes, such as independent contractors or business owners whose sales are volatile or seasonal, have fewer and more expensive financing options. The frequent demand by lending institutions to pledge collateral to obtain credit facilities is an additional deterrent to those seeking loans.

The account aggregator, at a minimum, makes it possible to share reliable and quality information on a customer’s banking behavior, cash flows and systemic payment behavior. By observing alternative data points and behaviors, financial institutions can assess assets and financial behavior, and make a better assessment for extending lines of credit. Across the credit and lending ecosystem, cash flow-based lending can gain a significant boost through the adoption of the account aggregation framework.

Read also : Key Forces Disrupting the Onboarding Process in the BFSI Industry

Fostering innovation in financial services

AA Framework strikes at the heart of the customer data landscape and is rightly touted as the UPI moment of the open data ecosystem; It has the potential to disrupt customer journeys where real-time, data-driven decision-making can create competitive advantage.

AA data reduces information asymmetry. For example, large banks can come back to their existing customers with better deals since they have access to customer financial data. In a way, information asymmetry stifles competition and innovation in the fintech industry. Because AA data is system-generated and available in real time, it can accelerate data-driven innovation at a significantly lower cost. Fintechs can step into the dominance of incumbent banks to deliver cutting-edge products to underbanked communities and bring better deals to existing customers. Digital lending has already made headway, and insurance and wealth management are following suit.

However, while these are early steps for the AA ecosystem, the regulator and government push has led to a rapid take-off, well supported by early adopters among fintechs. In the current phase, better UX to educate and onboard customers on AA platforms will help unlock opportunity before network effects kick in.

By Amit Das, CEO and Co-Founder of Think360.ai

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HDFC CEO sees demand for mortgages in India picking up despite rate hikes https://forumdellamagia.org/hdfc-ceo-sees-demand-for-mortgages-in-india-picking-up-despite-rate-hikes/ Mon, 12 Sep 2022 10:52:00 +0000 https://forumdellamagia.org/hdfc-ceo-sees-demand-for-mortgages-in-india-picking-up-despite-rate-hikes/

Demand for home loans is strong in India and is expected to increase further in the coming months, the director of major housing finance company Housing Development Finance Corporation said on Monday.

“The economy is buoyant, the feel-good factor is high, affordability is better, so people are comfortable buying homes even if rates are slightly higher,” Keki Mistry told Reuters. , CEO of HDFC.

India’s central bank has already raised rates three times by a total of 140 basis points this fiscal year to rein in stubbornly high inflation, which has remained above the central bank’s tolerance band for several months.

Lenders passed on higher interest rates, but Mistry said there were no signs of stress among homebuyers and collections on loans remained robust.

Interest rates are set to rise further, with economists expecting at least another 60 basis points by March 2023, according to a Reuters poll.

“The feel-good factor in the economy is so strong that (we) expect festival season to be very strong,” Mistry said, referring to the September-December period.

“I don’t think we’ll see too much interest rate hikes going forward, some increase will be there but don’t think that will discourage buyers,” he said.

Economists agree, with Madan Sabnavis, chief economist at Bank of Baroda, saying in a report late last month that homebuyers would be prepared for fluctuating rates.

Home loans rose 16% at the end of July compared to the same period last year, according to the latest data from the central bank.

Demand is expected to be particularly strong in major Indian cities, where sales had slowed between 2016 and 2020 but where a recovery is now visible, Mistry said.


HDFC-HDFC BANK MERGER

HDFC’s impending merger with the country’s largest private lender, HDFC Bank, in which it has a 21% stake, to create a financial services giant could be completed ahead of the expected 15-18 month deadline, Mistry said. .

A certificate of no objection from the Reserve Bank of India is already in place, signaling that the merger process can go ahead.

The merger, announced in April, will mark the world’s largest banking industry merger and acquisition since April 2007, according to Refinitiv data.

Mistry said the growth opportunities from the deal are huge.

“There are a lot of cross-selling opportunities, now we need to generate enough liabilities and the bank is already working on that by opening new branches and trying to collect deposits,” he added.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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Robot receives loan documents from Kerala bank. Watch the video https://forumdellamagia.org/robot-receives-loan-documents-from-kerala-bank-watch-the-video/ Sat, 10 Sep 2022 07:04:14 +0000 https://forumdellamagia.org/robot-receives-loan-documents-from-kerala-bank-watch-the-video/ A Kerala startup has done something out of the norm after its loan was sanctioned by a bank. The robotics company ASIMOV has sent its advances robot SAYABOT to receive sanctioned loan documents. Now, their out-of-the-box attempt has gone viral and netizens can’t help but gush over the robot clad in a kasavu saree from Kerala.

The clip shared by Ananth Rupanagudi shows the robot receiving documents from bank officials. “Hi everyone, I’m so glad to meet you all today at Ernakulam Press Club. I wish you all a very happy Onam in advance. It’s such a great privilege to receive financial assistance from Federal at the name of ASIMOV robotics. With this, the Federal Bank has once again proven that it will always be there to support the development of indigenous technologies. Thank you Federal Bank for making our Onam colorful. Thank you all”, hears- we say the robot.

Adding to the celebratory vigor of Onam, Jayakrishnan T, CEO of the robotics company, shared a clip showing the robot singing a traditional boat song.

Watch the video here:

Many users appreciated the innovation while others criticized the marketing tactics. One user wrote, “Jokes aside, it’s really very encouraging to have to believe in something he/she invests money in, and I believe this cud bd ri8 approach to selling/marketing an idea to get the funds. These guys turned concept marketing into product marketing. Al dbst. Another user commented: “Wow!!! So very well presented, who wouldn’t approve of a loan.”

Robot videos often attract attention online. In January this year, a video showing a young man playing badminton with a robot as an opponent took the internet by storm. The robot was seen sliding and hitting the steering wheel with ease. The video was apparently shot from Gujarat’s science city of Ahmedabad.

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Stocks to watch: NDTV, Dr.Reddy’s, IndiGo, SBI, Zee, consumer companies https://forumdellamagia.org/stocks-to-watch-ndtv-dr-reddys-indigo-sbi-zee-consumer-companies/ Thu, 08 Sep 2022 01:41:00 +0000 https://forumdellamagia.org/stocks-to-watch-ndtv-dr-reddys-indigo-sbi-zee-consumer-companies/


Stocks to watch today: Major benchmarks look set to start on a high note by tracking smart gains in US markets, although fears of another rate hike remained elevated. At 06:45, SGX Nifty futures were quoted at 17,724, indicating a likely deviation of almost 100 points from the benchmark NSE this morning.

In the meantime, here’s a list of stocks likely to see action in trades on Thursday.


NDTV: According to a statement released by the company to ESB, Adani Group has made an open offer to acquire an additional 26% stake (16.76 million shares) at Rs 294 per share. The open offer will start on October 17 and end on November 1.


InterGlobe Aviation (IndiGo): IndiGo Airlines co-promoter Rakesh Gangwal is likely to sell up to 2.8% stake in parent company InterGlobe Aviation through block deals for around Rs 2,000 crore, sources have said. . READ MORE


Dr. Reddy’s Laboratories: The pharmaceutical major has launched lenalidomide capsules, a generic therapeutic equivalent version of the USFDA-approved REVLIMID (lenalidomide) capsules on the American market. With this limited volume launch, Dr. Reddy’s is eligible for first-to-market, 180 days of generic drug exclusivity for lenalidomide capsules in 2.5 mg and 20 mg strengths.


Dependency (RIL): The retail arm of the company – Reliance Retail wants to be “Atmanirbhar” by creating affordable indigenous products that can be scaled. A few days ago, the company surprised the market by acquiring the Campa brand from Delhi-based Pure Drinks Ltd for Rs 22 crore. READ MORE


SBI: India’s largest lender, the State Bank of India, on Wednesday issued additional Tier 1 (AT1) bonds worth a total of Rs 6,872 crore at a cutoff of 7.75%, the lowest rate set for such debt issuances by a bank so far in the current financial year. READ MORE


Zee: The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday ordered Zee Entertainment to convene a meeting of shareholders on October 14 to approve the merger with Culver Max Entertainment (formerly Sony Pictures Network).


Consumer businesses: More than 2 years after the Covid outbreak, consumer companies are seeing strong festival sales. The festival season has already started in western and southern India with Ganesh Chaturthi and Onam respectively. READ MORE


Apollo tyres: There are some interesting structural changes in the tire industry. After eight years of stable achievements, achievements increased by 24% between fiscal years 2019-2020 and 2021-22. This should boost EBITDA and reduce capital expenditure as a percentage of revenue provided raw material costs come down. READ THE ANALYSIS


JSW Group: JSW Group, controlled by Sajjan Jindal, seeks to grow JSW One Platforms into an e-commerce giant for the building materials industry with a targeted gross market value (GMV) of $20 billion by FY32.


HDFC Bank: India’s largest private sector lender has raised its marginal cost of funds-based lending rate (MCLR) by 10 basis points (bps), effective September 7. This is the second rate hike in two months by the private sector lender after the six RBI Members Rate Setting Committee raised the benchmark repo rate by 50 basis points to 5 .40%.


Axis Bank: In its bid to boost lending to priority sectors, the bank has entered into a partnership with the PayNearby branchless banking network. READ MORE


Bucket Media & Technology Brand: The board of the company has approved the raising of up to Rs 33 crore through the issuance of 1 crore convertible stock warrants to non-promoters on a preferential basis at Rs 33 per warrant.


Stocks under F&O prohibition: Delta Corp is the only stock in the F&O ban on Thursday.

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