Indonesia's Financial Services Authority has issued regulations for alternative lenders; the regulations are slightly less strict than expected; they require fintech companies to have capital of 1 billion rupiah ($74,239) when registering their business and capital of 2.5 billion rupiah ($187,210) when applying for a business license; the regulations do not set any limits on interest rates. Source
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Online Lending
Kabbage is reportedly considering an acquisition of small business online lender OnDeck; S&P Global analyzes a potential merger between the two firms which has high value deal prospects including combined 2016 SME loan originations of $3.82 billion, costs savings from similar balance sheet and securitization funding sources, and similar success in technology licensing partnerships, overall resulting in increased margins, earnings and more competitive terms to borrowers; the valuation metrics and negotiation factors are the main constraints to a potential deal; the minimum enterprise value reported by S&P Global is $291.7 million which is below its current market cap of $372.4 million and far below its original IPO valuation of $1.3 billion; key factors to watch for 2017 will be OnDeck's forecasted EBITDA and fundraising obtained by Kabbage. Source
Big banks reported their seventh consecutive month of increased approval rates at 24.1%; small bank lending approvals decreased in February to 48.8% from 48.9%; institutional lending approvals reached a new high of 63.5%; the approval rate for credit unions remained at 40.8%; the loan approval rate for alternative lenders decreased to 58.4% from 58.5% in January and has been trending lower over the past twelve months with February 2016 reporting an approval rate of 60.8%. Source
