News Briefing - Crowdfunding, SME And Alternative Finance

A lady at the counter talking to a bank teller

1.UK - FinTech 


“The ‘OakNorth of agriculture’ is set to launch next week after clinching an additional £15m fundraise from Wheatsheaf Group, part of the Duke of Westminster’s Grosvenor Estate. 

Oxbury Bank, the specialist lender for farmers, says it will be the first new agricultural bank to open its doors in nearly 100 years. 

Wheatsheaf’s investment in Oxbury, first reported by The Telegraph, means that the Duke of Westminster, Hugh Grosvenor, is indirectly a shareholder in the venture. 

Oxbury’s launch comes just under 12 months after Oxbury, led by CEO and ClearBank co-founder James Farrar, received its banking licence from the Bank of England’s Prudential Regulation Authority and the Financial Conduct Authority. 

 

2. UK – FinTech 


AltFi reports: 


“Alternative lender Nucleus Commercial Finance has pledged to lend £200m to SMEs through the government-backed Coronavirus Business Interruption Loan Scheme (CBILS) by the end of March. 

Nucleus says it currently has an approval rate of over 90 per cent and is on track to meet its target before the scheme is due to shutter. 

The lender, which received accreditation to the government-backed loan scheme in July 2020, was also named Alternative Finance Platform of the Year 2020 at the AltFi Awards in December 2020. 

Chirag Shah, CEO of Nucleus Commercial Finance, said: “Following the Government’s announcement to extend CBILS to the end of March, we have set out ambitious plans to lend a total of £200 million through the scheme, providing SMEs with the crucial funds they need in the ongoing crisis.” 

“In 2020 we have seen alternative and fintech lenders move into the mainstream as SMEs are turning to our industry as the first point of call. This is due to our ability to provide SMEs with vital funds quicker than high street banks.” 

The government scheme, which is due to close on 30 March 2021, has seen £19.64bn worth of loans dished out to over 82,600 businesses since it first opened in March of last year.” 

3. US – FinTech 


Finextra reports: 


“Top US banking regulator, the Office of the Comptroller of the Currency, has approved the use of stablecoins for the settlement of financial transactions by banks. 

The OCC guidance clears the way for banks to participate in independent node verification networks (INVN) and use stablecoins to conduct payment activities and other bank-permissible functions.

Acting Comptroller of the Currency Brian P. Brooks, says: “The President’s Working Group on Financial Markets recently articulated a strong framework for ushering in an era of stablecoin-based financial infrastructure, identifying important risks while allowing those risks to be managed in a technology-agnostic way. Our letter removes any legal uncertainty about the authority of banks to connect to blockchains as validator nodes and thereby transact stablecoin payments on behalf of customers who are increasingly demanding the speed, efficiency, interoperability, and low cost associated with these products.”

The agency letter concludes a national bank or federal savings association may validate, store, and record payments transactions by serving as a node on an INVN. Likewise, a bank may use INVNs and related stablecoins to carry out other permissible payment activities.

While the OCC's approval added to the surge of investor interest in cryptocurrency, the guidance does not cover decentralised assets like bitcoin. Rather, the lifting of perceived restrictions is linked to regulatory-approved bank-issued coins and central bank digitial currencies.” 

 

4. International – FinTech 

 

Crowdfundinsider sees IPOs – lots of them – ahead. 

 

“2020 was a pretty good year for initial public offerings (IPOs). According to a tally put together by Renaissance Capital, 216 IPOs booked $78.1 billion during the year of COVID-19. 

Additionally, IPOs gained, on average, a whopping 75% – said to be the biggest post offering gains in the past 20 years. A good number of public offerings topped the $1 billion amount.  And the SPAC (special purpose acquisition company) party certainly helped. Renaissance says that a robust 2020 should be followed by a gangbusters 2021.  Included in this expectation for companies going public include the potential for a good number of Fintechs to finally trade shares on a regulated exchange. 

So while there are many big firms planning to go public this year, it appears that 2021 may be the year that Fintechs really blow the doors of public markets. Of course, it all depends on how markets are behaving in a year of transition from the Trump administration to President Joe Biden. But many prognosticators expect that persisting low-interest rates, government stimulus, and a Fed that is determined to keep the economy humming – things are looking pretty good. 

 

5. International – FinTech 

Crowdfundinsider reports: 

“Andrew King, Head of Synechron, a digital transformation consulting firm for financial services, notes that the exponential growth in digital transactions and data, along with regulatory developments, is changing the way companies are conducting business. 

King pointed out in an Op-Ed published by Insurance Business Mag that in a post COVID environment, the improved and responsible use of data has “never been more important as well as using this data to better understand consumer demands.” 

Companies offering financial services are reacting to changes and exploring new ways to “generate revenue to maintain their relevance in a hyper-personalized world and insurers are no different,” King claims. Insurance providers are focused on remaining competitive in a post COVID world by “turning to ‘Open Insurance’ to achieve greater customer personalization, increased market share and to deliver profitable, innovative services,” King added.”