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Inside the Groundbreaking Nova Credit-American Express Partnership

Immigrants will be able to use their international credit history when applying for an American Express card

October 29, 2019 By Peter Renton 2 Comments

Views: 599

It all started with a cold LinkedIn message back in 2016. The co-founder of the (then) tiny startup Nova Credit, Nicky Goulimis, reached out to an executive at American Express to discuss a potential partnership. It was an audacious move but one that, three years later, has paid tremendous dividends for the company.

First, some background. Nova Credit is an award-winning startup (they were the 2017 PitchIt @ LendIt winner) trying to solve what has been an intractable problem. New immigrants, no matter how great their credit was in their home country, are treated like subprime borrowers with no credit history when applying for credit in this country. In today’s interconnected world this is just crazy.

I lived this problem firsthand when I first moved to this country many years ago. So, did the co-founders of Nova Credit and they decided to do something about it. I spoke with Nicky Goulimis, their COO, yesterday to find out how they were able to win over American Express and establish this groundbreaking new partnership.

After that initial message Nova Credit found a receptive audience in American Express. Nicky said, “They immediately grasped what we were trying to do. Our vision of creating a world beyond borders aligns with American Express’s promise to back its cardmembers, wherever they might hail from.” American Express recognized right away that this was a pain point for many potential American Express customers who were prime consumers back in their home country.

How the Partnership Will Work

[Read more…]

Filed Under: Fintech Tagged With: American Express, Credit Bureau, fintech partnerships, International, nova credit

Views: 599

Understanding the International Student Lending Ecosystem in the U.S.

In this guest post Nomad Credit gives us perspective into the large international student lending industry.

February 26, 2018 By admin Leave a Comment

Views: 81

[Editor’s Note: This is a guest post from Nathan Treadwell, VP of Business Development at Nomad Credit. Nomad Credit is committed to lowering the barriers to credit for international students and visa holders. Nomad Credit’s platform helps internationals search for loan options through its partnerships with U.S. and foreign lenders.]

There are almost 1.2 million international students currently studying in the United States. They hail from countries all over the world with almost a third – more than 360,000 – coming from China and just over 205,000 coming from India. South Korea and Saudi Arabia follow behind dropping down to just over 70,000 and 55,000, respectively. With education costs often approaching six figures and beyond, an international student loan ecosystem has emerged both in the U.S. and abroad to serve the educational funding needs of this demographic.

U.S. lenders have taken great interest in lending to international students studying in the U.S. as the high costs of education provides great demand for a private funding source. Challenges lenders face with international students are similar to U.S. students in that they typically do not have any credit history. However, lenders must consider the additional flight risk involved as many of these students will not stay in the United States after graduating. Thus, new challenges may arise as lenders seek to collect on loans internationally.

How to Mitigate Flight Risk

It is challenging to know just how great the flight risk is, as it is an emerging market. Lenders have found ways to mitigate this risk through school involvement, U.S. cosigners and program consideration.

[Read more…]

Filed Under: Peer to Peer Lending Tagged With: International, student lending

Views: 81

Exclusive Interview with Mr. Huan Chen of CreditEase

December 4, 2013 By Peter Renton 13 Comments

Views: 49

 CreditEase logo

[This Is the second article in a two part series on CreditEase, the world’s largest p2p lender. The first article provided some background on the p2p lending market in China and CreditEase. Here we delve into some specifics about CreditEase to help understand how p2p lending works in China.]

When I was introduced to Mr Huan Chen, Chief Strategy Officer of CreditEase, I jumped at the chance to do an email interview. Here are his unedited responses.

Q. How big do you think the peer-to-peer lending industry is in China? How many platforms are there?

China’s P2P industry quite different from the US market, we can see many new startups into the industry every month, therefore we don’t know exact the number of P2P platforms in China, some people estimate that there are 1000+ companies in the field. Again, we also don’t know the market size in China, it might be about 20-30 bln USD in this year.

Q. Can you please explain your business model for our US readers. 

Basically, our P2P model is quite similar to the US p2p players. The platform develops both potential borrowers and lenders, assess creditworthiness of the borrowers and then underwrites loans, sets the loan size and determines interest rates. The platform charges both borrowers and lenders a service fee.

What makes it different from the US market is that P2P platforms in China mainly use a sales force to acquire clients [borrowers]. The personal loan/personal credit market is still very new in China, banks have not historically offered personal credit loans, and there is no similar marketing channel in China as targeted direct mail in US, so platforms needs to build a direct sales model in order to target and educate potential customers.

Q. Who are the typical borrowers and typical lenders?

The target customer differs from the US since most of our borrowers are underserved individuals and micro-business owners who can’t borrow from the banks. Many of them don’t have any credit history with banks. That is why we think that the P2P industry is quite helpful for the development of inclusive finance in China.

The purpose of borrowing is quite different as well.  As we know, LC’s borrowers mainly borrow money for debt consolidation but in China, they mainly borrow money for business purpose.  Even if they are salary workers, they might use the proceeds on their side-businesses or businesses run by their family.

The lenders in P2P platform in China are mainly individuals. They are typically part of what is called the mass affluent with an average of over 200,000 yuan ($32,000) invested. We also partner with trust companies in China as institutional lenders.

Q. Can you share what kind of lending volume you are doing in US dollars in the past year and the past month? 

[Read more…]

Filed Under: Peer to Peer Lending Tagged With: China, CreditEase, International

Views: 49

The World’s Largest P2P Lending Company That You Have Never Heard Of

December 3, 2013 By Peter Renton 5 Comments

Views: 1,046

Map of China

[This is the first in a two part series on the Chinese p2p lending market. Tomorrow we will bring you an exclusive interview with a senior executive at the world’s largest p2p lender.]

Quick quiz, what is the largest e-commerce company is the world? Amazon? eBay? Wrong. It is the Alibaba Group in China, which is way larger than Amazon and eBay combined. In fact, Alibaba just did $5.75b in sales in a single day last month. To put that into perspective, this article from USA Today said all US companies (Amazon, eBay, Walmart.com, Bestbuy.com, etc) on Cyber Monday this year did $2.29 billion in sales. Yes, Alibaba (and China) is that large.

Ok, second quiz, what is the largest p2p lending company in the world? I think you know where I am going with this, but if you guessed Lending Club you would be wrong (even though I have stated as much on several occasions). Introducing China’s CreditEase, the largest p2p lending company in the largest p2p lending market in the world.

A Massive Market

Before we dive deep into CreditEase, let’s take a quick look at the massive Chinese p2p lending market. After doing some research on the Chinese market, the first thing I have to say is that no one knows exactly how large the market is, but everyone agrees that it is HUGE. The general consensus is that there are more than 2,000 p2p lending companies in China (see here and here) and they are categorized as part of the Chinese shadow banking economy, which is estimated to be 22 trillion yuan or $3.6 trillion US dollars according to Credit Suisse. According to Caixin Online, which cites a report published by the People’s Bank of China (China’s equivalent of the Federal Reserve), the Chinese p2p lending market is worth 60 billion yuan, which is the equivalent of $9.8 billion US dollars! If you drill down further, the research firm Celent Research, recently published a report that estimates that the online p2p market originated $940m in 2012 and is expected to grow to $7.8 billion by 2015.

[Read more…]

Filed Under: Peer to Peer Lending Tagged With: China, CreditEase, International

Views: 1,046

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ABOUT LENDIT FINTECH NEWS

LendIt Fintech News, Powered by Lend Academy, has been bringing you all the news and information about fintech and online lending since 2010 when it was founded by Peter Renton. We not only have the industry’s most active news site, but also the largest investor forum and the first and most popular podcast.

We are a team of fintech enthusiasts who have been covering the industry for many years. With a deep knowledge of online lending, digital banking, blockchain, artificial intelligence and more our team covers the daily news and writes in-depth editorials.

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