Business Loans – PSP Book http://pspbook.com/ Tue, 22 Jun 2021 00:29:22 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.2 https://pspbook.com/wp-content/uploads/2021/05/default1-150x150.png Business Loans – PSP Book http://pspbook.com/ 32 32 Why is a digital financing alternative for your startup more convenient than a bank loan? https://pspbook.com/why-is-a-digital-financing-alternative-for-your-startup-more-convenient-than-a-bank-loan/ https://pspbook.com/why-is-a-digital-financing-alternative-for-your-startup-more-convenient-than-a-bank-loan/#respond Mon, 21 Jun 2021 22:06:00 +0000 https://pspbook.com/why-is-a-digital-financing-alternative-for-your-startup-more-convenient-than-a-bank-loan/ Traditional loans offer fixed amounts, with a fixed rate for a fixed term to be paid in fixed installments. This rigidity forces companies to borrow more than they need and therefore to pay more interest than they should. June 21, 2021 4 minutes to read This article was translated from our Spanish edition using AI […]]]>


Traditional loans offer fixed amounts, with a fixed rate for a fixed term to be paid in fixed installments. This rigidity forces companies to borrow more than they need and therefore to pay more interest than they should.

June 21, 2021

4 minutes to read

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.


The most recurring problem for companies today, and the main reason for bankruptcy, is the lack of cash. In other words, when entrepreneurs start to run out of cash to operate, a common mistake is to resort to SME loans from traditional banks.

Traditional loans offer fixed amounts, with a fixed rate for a fixed term to be paid in fixed installments. This rigidity forces companies to borrow more than they need and therefore to pay more interest than they should.

That’s why Higo, the platform that lets you pay, collect, and fund all business invoices in one place to maximize cash flow, recommends using digital alternatives that allow them to function, reduce the risk of bankruptcy and not go into further debt.

The main reason for using these financial alternatives is that they can ensure that your business always has cash on hand. It should be mentioned that even the most profitable industries can have operational flow issues because you never know when the market may turn 360 degrees.

This is why entrepreneurs must turn to financing alternatives that help them, with one click, to pay their suppliers when they do not have the money to do so, with the possibility of settling said payment on time. 60 days. .

The above gives certainty to the company when the capital stops flowing due to an external factor, it also prevents it from getting into debt and having to resort to conventional credit which can help it at the time, but affect it in the long term.

Depositphotos.com

Another factor is the sudden and unexpected drop in sales. There are products and services that sell more during certain seasons of the year, depending on their industry and the need they serve, which is why entrepreneurs should know that there is no formula. unique to manage the resources within their company, because on the contrary, they must always remain flexible and adaptable to the changes that the context generates.

Another problem that businesses face is that customers take too long to settle payments to the business. For this reason, businesses need an alternative that advances the amount of invoices receivable to the business. This avoids that during this period when they are waiting to receive money from the client who is late in paying their finances, they are affected by the lack of liquidity.

This way the entrepreneur has the money and can then pay the platform for the prepayment.

“For businesses in the country, it is important to have an alternative financing that helps them prevent the lack of operating cash flow leading to the closure of operations. Even more in Mexico, a country where business life expectancy is between 7 and 9 years in the center of the country, which drops to 5 years in some parts of the interior of the republic, according to Inegi data, ”said Rodolfo Corcuera CEO and co-founder of Higo.

The entry and exit of cash is like the oxygen of startups. Without cash flow, businesses run a high risk of being negatively impacted, even if they are profitable. Entrepreneurs need platforms created to help them avoid the red numbers and streamline processes quickly and with one click, instead of resorting to traditional methods which, beyond giving them a loan, can be the start of business. ‘a long road of debt and interest payments.



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National Mortgage Rates Today | Prices continue to climb https://pspbook.com/national-mortgage-rates-today-prices-continue-to-climb/ https://pspbook.com/national-mortgage-rates-today-prices-continue-to-climb/#respond Sun, 20 Jun 2021 12:45:00 +0000 https://pspbook.com/national-mortgage-rates-today-prices-continue-to-climb/ Mortgage rates for fixed and adjustable rate mortgages have increased since last week, and even more since last month. However, they are still low compared to the rates of the last few years, so overall it’s a good day to lock in a low rate. If you’re ready to buy or refinance, you’ll probably want […]]]>


Mortgage rates for fixed and adjustable rate mortgages have increased since last week, and even more since last month. However, they are still low compared to the rates of the last few years, so overall it’s a good day to lock in a low rate.

If you’re ready to buy or refinance, you’ll probably want a fixed rate mortgage rather than an adjustable rate mortgage. ARM rates are starting to be higher than fixed rates right now, and you could risk your rate going up even more in a few years. It’s safest to lock in an all-time low rate while you can.

Mortgage rates today

Today’s refinance rate

What is a mortgage rate?

A mortgage rate is the interest you pay on the money you borrow from a lender to buy or refinance your home. These are basically the fees you pay to borrow, expressed as a percentage. For example, you can take out a mortgage for $ 200,000 plus an interest rate of 2.75%.

There are two types of mortgage rates: fixed rates and adjustable rates.

A fixed rate mortgage lock in your rate for the duration of your mortgage. Even if the rates in the US market go up or down, your rate will stay the same. It’s a good deal right now, as rates are at historically low levels.

A adjustable rate mortgage keeps your rate the same for a predetermined amount of time, then changes it periodically. A 10/1 ARM locks in your rate for the first 10 years, then the rate fluctuates once a year. It’s a riskier approach these days because ARM rates start higher than fixed rates, and you risk your rate going up later.

How are mortgage rates determined?

Mortgage rates are determined by a combination of factors – some you can control and some you cannot.

The main external factor is economy. Interest rates tend to be higher when the US economy is booming and lower when it is struggling. The two main economic factors that affect mortgage rates are employment and inflation. When the number of jobs and inflation increase, mortgage rates tend to rise.

You can control your finances, But. The better your credit score, debt-to-income ratio, and down payment, the lower your rate should be.

Finally, your mortgage rate depends on what type of mortgage you obtain. Government guaranteed mortgages (like FHA, VA, and USDA loans) charge the lowest rates, while jumbo mortgages charge the highest rates. You will also get a lower rate with a shorter mortgage term.

What credit score do you need for a mortgage?

Each type of mortgage loan has a different minimum credit score requirement. Here’s how it typically breaks down:

These are just the general rules of thumb, however. Every lender has the right to demand a higher or lower credit score. (Although the FHA minimums listed here are the lowest a lender allows.)

If your credit score is above the minimum required by a lender, you could get a better mortgage interest rate.

Find out more and get offers from several lenders »

Mortgage rates last week and last month

Mortgage rate trends

Average mortgage rates for government guaranteed loans tend to hold up, and this trend is clear over the past month as FHA and VA loan rates remain in the 2.70% to 2.85% range. The rates for conventional mortgages, i.e. fixed and variable rate loans, fluctuate a little more. Last week they increased, although most rates are still well below 4%.

Trends in refinancing rates

Mortgage and refinancing rates by state

Check out the latest rates for your state at the links below.

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
new York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
Caroline from the south
South Dakota
Tennessee
Utah
Vermont
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Wyoming

About the authors

Laura Grace Tarpley is a writer at Personal Finance Insider, covering mortgages, refinancing and loans. She is also a Certified Personal Finance Educator (CEPF). During her five years of personal finance coverage, she has written extensively on how to navigate loans.

Ryan Wangman is a Review Officer at Personal Finance Insider and reports on mortgages, refinancing, bank accounts, bank reviews, and loans. During his past personal finance writing experience, he wrote on credit scores, financial literacy, and homeownership.



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AfDB $ 250 million loan to support Bangladesh’s social resilience program https://pspbook.com/afdb-250-million-loan-to-support-bangladeshs-social-resilience-program/ https://pspbook.com/afdb-250-million-loan-to-support-bangladeshs-social-resilience-program/#respond Sat, 19 Jun 2021 03:39:00 +0000 https://pspbook.com/afdb-250-million-loan-to-support-bangladeshs-social-resilience-program/ The Asian Development Bank (AfDB) on Friday approved a $ 250 million loan to the government of Bangladesh to help finance reforms aimed at improving the inclusion and responsiveness of the country’s social development and resilience agenda. The social resilience building program will include institutional and policy reforms to address cross-sectoral social development issues in […]]]>


The Asian Development Bank (AfDB) on Friday approved a $ 250 million loan to the government of Bangladesh to help finance reforms aimed at improving the inclusion and responsiveness of the country’s social development and resilience agenda.

The social resilience building program will include institutional and policy reforms to address cross-sectoral social development issues in Bangladesh, the Manila-based lender said in a statement received Friday.

“Strengthening support for social protection is essential to mitigate the effects of the pandemic,” said Hiroko Uchimura-Shiroishi, AfDB Senior Social Sector Specialist for South Asia.

He said: “The AfDB supports the government’s intention to leverage the Covid-19 pandemic as an opportunity to strengthen its social protection programs as a critical means of building the resilience of the poor and supporting an inclusive recovery . “

According to the statement, Bangladesh has made remarkable progress in reducing poverty over the past two decades. The incidence of poverty fell from 48.9% in 2000 to 20.5% in 2019, he added.

–IANS

int / rs

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

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Denver man charged with COVID relief loan fraud | USAO-CO https://pspbook.com/denver-man-charged-with-covid-relief-loan-fraud-usao-co/ https://pspbook.com/denver-man-charged-with-covid-relief-loan-fraud-usao-co/#respond Thu, 17 Jun 2021 22:00:33 +0000 https://pspbook.com/denver-man-charged-with-covid-relief-loan-fraud-usao-co/ DENVER – The United States Attorney’s Office for the District of Colorado announced that Anthony Zaghab, 52, of Denver, was arraigned today on charges relating to more than $ 700,000 in COVID relief loans and unemployment insurance obtained fraudulently. He was charged with wire fraud. According to allegations in information filed in federal court, as […]]]>


DENVER – The United States Attorney’s Office for the District of Colorado announced that Anthony Zaghab, 52, of Denver, was arraigned today on charges relating to more than $ 700,000 in COVID relief loans and unemployment insurance obtained fraudulently. He was charged with wire fraud.

According to allegations in information filed in federal court, as of April 2020, Zaghab has submitted bogus and fraudulent Economic Disaster Loan (“EIDL”) applications and applications for the Bank’s Check Protection Program. payroll (“PPP”) to the Small Business Administration and an approved lender. In February 2021, he had submitted fraudulent claims that brought him $ 660,000 in payments. Zaghab also claimed and received over $ 40,000 in unemployment insurance benefits on behalf of ineligible family members without their knowledge or consent.

Zaghab owned or controlled several legal persons. He also claimed to own or control several other entities bearing his name and the names of his family members. In loan applications for these entities, Zaghab falsely stated the number of employees, assumed gross income, and assumed cost of goods sold. Zaghab also applied for and obtained an EIDL for a fictitious business entity named after her late father. In addition, Zaghab has sought and attempted to obtain economic disaster loans on behalf of fictitious or purported business entities on behalf of family members, without the knowledge or consent of such family members.

Zaghab submitted a PPP application in June 2020 for a company called “Anthony Zaghab”. He falsely represented the date of creation of the company and its monthly payroll. He received a PPP loan in the amount of $ 20,833. Zaghab applied for and received a second PPP loan of $ 20,832 for “Anthony Zaghab” in February 2021. He received two more PPP loans of over $ 20,830 each for a shell business on behalf of a family member.

Zaghab also applied for and received approximately $ 41,500 in Colorado Pandemic Unemployment Assistance (“PUA”) for ineligible family members without their knowledge and consent. These family members included his mother and sister, both of whom resided outside the United States, and his late father.

The charges contained in the Information are allegations. The defendant is presumed innocent until proven guilty.

The American secret services have investigated this case. Deputy US prosecutors Martha Paluch and Rebecca Weber are handling the prosecution.

File number: 21-cr-00188-RBJ

# # #

Visit our website http://www.justice.gov/usao/co | Follow us on twitter @DCoNews

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Commercial Bank of Dubai partners with Network International for pre-approved commercial loans https://pspbook.com/commercial-bank-of-dubai-partners-with-network-international-for-pre-approved-commercial-loans/ https://pspbook.com/commercial-bank-of-dubai-partners-with-network-international-for-pre-approved-commercial-loans/#respond Thu, 17 Jun 2021 04:53:38 +0000 https://pspbook.com/commercial-bank-of-dubai-partners-with-network-international-for-pre-approved-commercial-loans/ The Commercial Bank of Dubai (CBD) has announced that Network International will provide its merchant clients with pre-approved commercial loans against their receivables at the point of sale. As a result, CBD will offer commercial loans to Network’s retail and e-commerce customers against their point of sale (POS) machines or the payment gateway product, quickly […]]]>


The Commercial Bank of Dubai (CBD) has announced that Network International will provide its merchant clients with pre-approved commercial loans against their receivables at the point of sale.

As a result, CBD will offer commercial loans to Network’s retail and e-commerce customers against their point of sale (POS) machines or the payment gateway product, quickly and with minimal documentation, according to a report released by the state news agency. WAM.

CBD offers commercial loan amounts with repayment terms of up to 36 months. It also offers an exclusive digital business account for SMEs that can be opened instantly with zero balance options, with exclusive services tailored for businesses.

“The collaboration with Network International is in line with our commitment to promote the overall business environment in the UAE and support SMEs and startups, as they are vital contributors to the growth of the economy,” said Amit Malhotra , Managing Director of the Personal Banking group. .

“Since last year, there has been a huge increase in the number of contactless transactions and merchants using point-of-sale machines, largely due to the global Covid-19 pandemic. We see a strong demand and an opportunity to provide these merchants with adequate support and financing solutions to streamline their working capital so that they can focus on growing their business.

This initiative complements our recent partnerships with Dubai Economy and Emirates Development Bank (EDB), ”added Malhotra.

CBD recently signed a memorandum of understanding with EDB for credit guarantee and co-loan programs for small and medium enterprises (SMEs) in the United Arab Emirates. As part of this memorandum of understanding, CBD can offer financing of up to 10 million Dhs to an SME, and 50% of the amount of the facility will be either guaranteed or co-loaned by EDB.

Read: Emirates Development Bank and Commercial Bank of Dubai sign MoU for SME loan program



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Fashion Square owner files for Chapter 11 bankruptcy | Business premises https://pspbook.com/fashion-square-owner-files-for-chapter-11-bankruptcy-business-premises/ https://pspbook.com/fashion-square-owner-files-for-chapter-11-bankruptcy-business-premises/#respond Tue, 15 Jun 2021 23:41:00 +0000 https://pspbook.com/fashion-square-owner-files-for-chapter-11-bankruptcy-business-premises/ Store closures are evident due to the colorful window coverings seen throughout Fashion Square Mall. DAILY PROGRESS RECORD STAFF REPORTS Washington Prime Group Inc., which owns part of the Charlottesville Fashion Square shopping center, has filed for Chapter 11 bankruptcy. The move comes after reports earlier this year that the company was preparing a potential […]]]>







Store closures are evident due to the colorful window coverings seen throughout Fashion Square Mall.


DAILY PROGRESS RECORD


STAFF REPORTS

Washington Prime Group Inc., which owns part of the Charlottesville Fashion Square shopping center, has filed for Chapter 11 bankruptcy.

The move comes after reports earlier this year that the company was preparing a potential bankruptcy filing after ignoring an interest payment on its debt.

The company has stakes in 102 properties, but Fashion Square in Albemarle County is one of five properties that Washington Prime Group no longer operates because it is in receivership.

In a press release, the company said it had secured $ 100 million in “debtor-in-charge financing” to support day-to-day operations during the Chapter 11 process.

“The COVID-19 pandemic has created significant challenges for many businesses, including Washington Prime Group, making a Chapter 11 filing necessary to reduce the company’s outstanding debt,” the statement said.

Washington Prime Group will use Chapter 11 to implement a corporate-level financial restructuring of its debt that will “strengthen its business and operations in the future,” the statement said.

At the end of 2019, the mortgage guaranteed by Fashion Square was transferred to special service because, due to the loss of certain tenants, “the borrower informed the lender that the projected future cash flows will be insufficient to ensure future compliance with the mortgage loan ”. Washington Prime Group said in its latest quarterly report.



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Moscow calls for the return of the conditions of micro-loans to businesses – RealnoeVremya.com https://pspbook.com/moscow-calls-for-the-return-of-the-conditions-of-micro-loans-to-businesses-realnoevremya-com/ https://pspbook.com/moscow-calls-for-the-return-of-the-conditions-of-micro-loans-to-businesses-realnoevremya-com/#respond Tue, 15 Jun 2021 06:00:00 +0000 https://pspbook.com/moscow-calls-for-the-return-of-the-conditions-of-micro-loans-to-businesses-realnoevremya-com/ Republic of Tatarstan’s First Deputy Minister of Economy Rustem Sibgatullin criticized federal restrictions on granting microloans to support SMEs The First Deputy Minister of Economy of the Republic of Tatarstan, Rustem Sibgatullin, tried to convince officials of the Ministry of Economic Development of Russia to postpone the three-year term for the repayment of concessional loans […]]]>


Republic of Tatarstan’s First Deputy Minister of Economy Rustem Sibgatullin criticized federal restrictions on granting microloans to support SMEs

The First Deputy Minister of Economy of the Republic of Tatarstan, Rustem Sibgatullin, tried to convince officials of the Ministry of Economic Development of Russia to postpone the three-year term for the repayment of concessional loans instead of the period year introduced due to the June 10 lockdown. With the introduction of these restrictions, the monthly payment automatically became larger and it became more difficult to repay loans. Industry conference attendees spoke for a longer period – up to five years.

Regional state funds in Kazan

Concessional loans for resumption of work after the forced shutdown during the pandemic and microloans to replenish working capital have helped businesses survive, and public funds to provide support have been found to be more flexible and mobile than banks. , the participants of the All-Russian Forum “Entrepreneurial microfinance. Season III” reported on June 10. It brought together more than 90 representatives of non-profit microfinance organizations with the participation of the state from 47 regions of the country. ranges from 200 million rubles to 2.5-3 billion rubles, but they are united by a common tool of business development: loans.

With the emergence of such organizations in the regions, they began to move away from the practice of direct grants to adopt repayable mechanisms to support small and medium enterprises, and the funds themselves merged into MiR SRO. At the forum, the director of the industry association, Elena Stratyeva, called on representatives of the funds to identify the main problems that federal authorities face in regulating their activities, because even after the pandemic, companies will need of their support. However, Tatarstan has turned out to be the main spokesperson for the community’s issues.

The director of the trade association, Elena Stratyeva, called on representatives of the funds to identify the main problems that federal authorities face in regulating their activities, because even after the pandemic, companies will need their support. Photo: Roscongrès

“We say people need support, but we made it worse”

“Is it possible to remove the restrictions more quickly”, the First Deputy Minister of Economy of the Republic of Tatarstan, Rustem Sibgatullin, raised the urgent issue of all regional funds, speaking to Olesya Teterina, director Deputy of the Department of Investment Policy and Entrepreneurship Development of the Ministry of Economic Development of Russia, by videoconference.

According to him, the introduction of federal restrictions on the repayment of loans of 3 to 2 years worsened the situation for entrepreneurs, because the monthly payment automatically became more important and it became more difficult to repay it.

We are talking about preferential loans issued by regional business assistance funds. Two years ago, on the proposal of the Ministry of Economic Development, the maximum loan amount was increased from 3 to 5 million rubles, and during the self-isolation regime, the regulator decided to reduce the term by 36 at 24 months. According to officials, the prompt repayment of loans was supposed to increase the volume of aid given, but in fact resulted in service difficulties.

“The self-employed also say – it’s better to give us a higher rate, but increase the loan repayment term. Then the monthly payment will be lower, “said the Deputy Minister of Economy of the Republic of Tatarstan. According to him, it has become more difficult for entrepreneurs to repay the loan over a shorter period.” We say that the people need support, but they ‘made it worse,’ he said, and the forum audience supported him.

“These restrictions apply because of the lockdown,” Olesya Teterina tried to argue. “First of all, we have to help those who are in a difficult situation.”

“But where is the logic? Rustem Sibgatullin asked again. “If people say, ‘Give it for three years,’ and for some unknown reason, we say, ‘We can’t, we have restrictions. “I don’t know if my colleagues will back me… Who’s for a three-year offer?” He turned to the audience.

At this point, the camera was facing the audience and showing a forest in the hands of the audience. “It’s better up to five years old!” shouted someone in the audience. In response, the representative of the ministry, Olesya Teterina, promised to include this issue as part of the “budget process” for next year.

“It seems that the logic is to give micro-loans to more SMEs, but it is not practical for companies,” Sibgatullin explained in a conversation with Realnoe Vremya. “It’s a simple calculation – get 5 million rubles and give it away in 24 months or 36 months. Clearly you will have to come back more per month with a two-year payback period.

“These restrictions apply because of the lockdown,” Olesya Teterina tried to argue. “First of all, we have to help those who are in a difficult situation.” Photo: fedpress.ru

The loans have been “linked” to the central bank’s key rate since June 1

The CEO of the Entrepreneurship Support Fund, Aydar Salikhov, said the loans have proven to be the most popular among businesses during the pandemic. A third of the portfolio went to companies that were not on the list of worst affected industries. To deal with the deal, the fund launched a 1% product for 2 years. 354 microloans amounting to more than 250 million have been issued. Since September, they stopped issuing 1% loans and launched the universal product Perezagruzka for all businesses. It represents 32% of the portfolio. Loans were issued for 300 million rubles at 6% per annum. In total, since the establishment of the fund in 2014, more than 2,500 loans worth 4.4 billion rubles have been issued

Radical changes have taken place since June 1, when the fund abandoned the fixed rate of 6% in favor of a floating rate. The interest rate on loans was linked to the central bank’s policy rate. It is the region’s right to determine how to form the cost of financing itself.

“Previously, there was a rate at 6% per annum, and since June 1, the rate has been lowered to 5% in the correlation of the Central Bank,” Aydar Salikhov said. At the same time, it does not exclude that after the increase of the Central Bank, the borrowing rate will be raised.

Aydar Salikhov raised the problem of loans to social entrepreneurs: according to him, only one loan was issued. Photo: tatarstan.ru

The Tatarstan Fund to catch up with the Krasnodar Fund

Another important news was that the fund intended to increase its capitalization by 400 million rubles – up to 2.5 billion rubles. In this case, the Tatarstan fund will catch up with the leader – the Krasnodar Krai Entrepreneurship Support Fund, the capitalization of which reached 3 billion rubles.

The dynamics of loan issuance are as follows. In 2019, 399 loans worth 934.6 million rubles were issued, 685 loans worth 1.4 billion rubles – in 2020. As of the beginning of this year, 225 loans worth 351.7 billion rubles were issued, reported Aydar Salikhov. In total, 621 loans worth 1.2 billion rubles are expected to be issued by the end of the year. He mentioned here the problem of loans to social entrepreneurs: according to him, only one loan was issued.

“But not because they don’t apply, and the conditions are like that. They must be registered in the register of social entrepreneurs. Only 12 entrepreneurs were included and only one obtained a loan. This year they will be 100. And they will have the opportunity to apply for loans, ”Salikhov said.

By Luiza Ignatyeva




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AI-powered loan apps are booming in India, but some borrowers are missing https://pspbook.com/ai-powered-loan-apps-are-booming-in-india-but-some-borrowers-are-missing/ https://pspbook.com/ai-powered-loan-apps-are-booming-in-india-but-some-borrowers-are-missing/#respond Sat, 12 Jun 2021 21:20:08 +0000 https://pspbook.com/ai-powered-loan-apps-are-booming-in-india-but-some-borrowers-are-missing/ Elevate your technology and enterprise data strategy to Transform 2021. (Reuters) – As the founder of a non-profit consumer rights organization in India, Karnav Shah is used to seeing sharp practices and unhappy customers. But even he was surprised by the sheer volume of complaints against digital lenders in recent years. While most of the […]]]>


Elevate your technology and enterprise data strategy to Transform 2021.


(Reuters) – As the founder of a non-profit consumer rights organization in India, Karnav Shah is used to seeing sharp practices and unhappy customers. But even he was surprised by the sheer volume of complaints against digital lenders in recent years.

While most of the grievances relate to unauthorized lending platforms misusing borrower data or harassing them for missed payments, others relate to high interest rates or loan applications that have been rejected without explanation, Shah said.

“It’s not like traditional banks, where you can talk to the manager or file a complaint with the head office. There is no transparency and no one to ask for redress, ”said Shah, founder of JivanamAsteya.

“It hurts young people who are starting out in life – a rejected loan can lead to a low credit rating, which will negatively affect larger financial events afterwards,” he told the Thomson Reuters Foundation.

Hundreds of mobile lending apps have mushroomed in India as the use of smartphones increased and the government encouraged digitization in the banking industry, with financial technology (fintech) companies rushing to fill the access gap to loans.

Unsecured loan applications, which promise quick loans even to those without a history of credit or collateral, have been criticized for their high lending rates, short repayment terms, as well as their methods of repayment. aggressive retrieval and misuse of customer data.

At the same time, their use of algorithms to assess the creditworthiness of first-time borrowers disproportionately excludes women and other traditionally marginalized groups, analysts say.

“Credit scoring systems were aimed at reducing subjectivity in loan approvals by decreasing the discretionary role of a loan officer over loan decisions,” said Shehnaz Ahmed, head of FinTech at the Vidhi Center for Legal Policy in Delhi.

“However, since alternative credit scoring systems use thousands of data points and complex models, they could potentially be used to mask discriminatory policies and can also perpetuate existing forms of discrimination,” he said. she declared.

New to credit

Globally, an estimated 1.7 billion people do not have a bank account, making them vulnerable to loan sharks and the risk of being excluded from vital government and social benefits, which are increasingly dispersed by means electronic.

Almost 80% of Indians now have a bank account, in part because of the government’s financial inclusion policies, but young people and the poor often lack the official credit history that lenders use to assess creditworthiness. ‘an applicant.

Almost a quarter of loan applications each month come from people with no credit history, according to TransUnion CIBIL, a company that generates credit scores.

Authorities have supported the use of AI to create credit scores for new credit consumers, who account for around 60% of motorcycle loans and more than a third of mortgages.

The algorithms help assess the creditworthiness of first-time borrowers by analyzing their social media footprint, digital payment data, number of contacts, and call patterns.

TransUnion CIBIL recently launched an algorithm that “mapped the credit data of similar subjects who have credit histories and whose information is comparable,” said Harshala Chandorkar, chief operating officer of the company.

Women made up around 28% of retail borrowers in India last year, up three percentage points from 2014, and have a slightly higher average CIBIL score than men, she said, without answer a question about the risk of discrimination of algorithms.

CreditVidya, a credit reporting company, uses an artificial intelligence (AI) -based algorithm that leverages “over 10,000 data points” to calculate its scores.

“A clear and unambiguous consent screen that articulates the data collected and the purpose for which it will be used is displayed to the user for consent,” he said.

EarlySalary, which claims its mobile loan app has garnered more than 10 million downloads, uses an algorithm that collects text and browsing history, as well as information from social media platforms, including Facebook and LinkedIn.

People who do not have a substantial social media presence could be disadvantaged by such techniques, Ahmed said, adding that many online lending platforms provide little information on how they assess creditworthiness.

“There is always an element of subjectivity in determining creditworthiness. However, this is accentuated in the case of alternative credit scoring models which rely on multiple data points to assess creditworthiness, ”she said.

Arbitrary practices

Personal loan applications in India – which are primarily intermediaries connecting borrowers to lending institutions – now find themselves in a regulatory gray area.

A long-delayed personal data protection bill being discussed by lawmakers would have conditions for requiring and storing personal data, and penalties for misuse of that data.

Authorized lending platforms are advised to engage in data capture with the informed consent of the client and to publish detailed terms and conditions, said Satyam Kumar, member of the Fintech Association for Consumer Empowerment (FACE) lobby group.

“Regular audits and internal checks of the loan process are carried out to ensure that no discrimination based on gender or religion is carried out manually or through automated analysis,” he said.

India’s central bank said it would develop a regulatory framework that “supports innovation while ensuring data security, privacy, privacy and consumer protection.”

This will help increase the value of digital loans to $ 1,000 billion in 2023, according to the Boston Consulting Group.

Digital lending will continue to favor historically privileged groups, with credit rating systems also granting loans more often to men than women in India, said Tarunima Prabhakar, researcher at Carnegie India.

If an algorithm assesses credit scores based on the number of contacts on a phone, it will likely find men more creditworthy, as Indian men have greater social mobility than women.

Thus, women may face loan refusals or higher interest rates.

“There is almost no transparency as to how these scores are achieved,” she said.

Digital lenders justify secrecy on the basis of competitive advantage, but there needs to be some clarification, including explanations when loans are rejected, she added.

“If these platforms make it easier for men but not women to start small businesses, it could reduce women’s agency into an already asymmetrical power dynamic,” Prabhakar said.

“In the absence of strong supervision and institutions, alternative lending can perpetuate the same arbitrary lending practices of informal credit markets that they aim to address.”

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Details unclear on Biden’s student loan relief priorities https://pspbook.com/details-unclear-on-bidens-student-loan-relief-priorities/ https://pspbook.com/details-unclear-on-bidens-student-loan-relief-priorities/#respond Sat, 12 Jun 2021 12:11:20 +0000 https://pspbook.com/details-unclear-on-bidens-student-loan-relief-priorities/ Biden’s regulatory program, released Friday, includes proposals for student loan forgiveness. The Education Department plans to improve loan cancellation programs by 2022, but details are vague. Democrats and borrowers continue to push for immediate debt relief while Biden is reluctant. Sign up for the daily 10 Things in Politics newsletter. From tackling the climate crisis […]]]>


  • Biden’s regulatory program, released Friday, includes proposals for student loan forgiveness.
  • The Education Department plans to improve loan cancellation programs by 2022, but details are vague.
  • Democrats and borrowers continue to push for immediate debt relief while Biden is reluctant.
  • Sign up for the daily 10 Things in Politics newsletter.

From tackling the climate crisis to strengthening protections against racial discrimination, President Joe Biden’s regulatory agenda released on Friday covers a lot of ground. Significantly, contrary to his budget, he even mentions the forgiveness of the student loan. But for borrowers awaiting clarification on what will happen to their debt, details are scarce.

the listing Regulatory Actions, typically released twice a year, describes how Biden plans to move his agenda forward in each federal agency.

According to the Education Department page, Biden’s agenda includes “improve student loan cancellation powers“in which Education Secretary Miguel Cardona” will amend regulations to improve borrower eligibility, requirements and application processes “for borrowers who meet loan cancellation criteria, such as being totally and permanently disabled , or attend a recently closed school.

The ministry also said it see again the Public Service Loan Remission Program (PSLF) and “plans to review these regulations for improvements”, as well as amendment the “borrower’s repayment defense,” which forgives student loans that have been scammed by for-profit schools.

The ministry plans to finalize the rules by April 2022.

“The past four years have offered a clear lesson in what happens when the executive fails to live up to its responsibility to protect the American people,” said Sharon Block, Acting Administrator of the White House Regulatory Office, in a statement. “Our first regulatory program demonstrates our commitment to reverse this trend. “

At the end of May, the education ministry announced that it was beginning the process of issuing new regulations on higher education, and Friday’s list confirmed those plans. But no further details were provided on what the mentioned improvements would look like.

This could be because the department is in the early stages of rule making. The first step in the process will be to hold hearings in June to receive feedback on the student loan waiver programs. it could take a year or more until the changes are implemented.

But borrowers and lawmakers are increasingly frustrated with the timeline for granting student loan forgiveness to eligible borrowers.

Biden campaign on the reform of the PSLF, which allows government and nonprofit employees on federally guaranteed student loans to request a loan forgiveness after proof of 120 monthly payments under a qualifying repayment plan.

However, loopholes in the program have existed for years. 98% of borrowers were rejected from the program, prompting 56 Democrats to urge Cardona to correct the program in early May, and Education Secretary Betsy DeVos was taken to court several times on the program’s high refusal rate.

Borrowers have had similar problems with defending the borrower against repayment. Over the past decade, several for-profit schools have closed their doors following investigations claiming schools were engaging in fraudulent behavior related to federal loans, which led President Barack Obama to establish the program. student debt cancellation for eligible fraudulent borrowers.

Under Obama, the program had an approval rating of 99.2%, but when DeVos took over, 99.4% of eligible borrowers were denied the program, and she will soon testify as to why that happened. is produced.

So while the ministry’s plans to review these programs hold promise for borrowers, the specific details are unclear. That’s why Massachusetts Senator Elizabeth Warren and other Democrats are asking Biden to write off $ 50,000 in student debt per borrower in order to provide immediate relief.

“The time is right,” Warren told Insider on Tuesday. “We know what the problem is: Student loan debt is holding tens of millions of people across this country. People who can’t buy a house, people who can’t buy cars, people who can’t start small businesses. We need to write off this student loan debt, not just for these individuals individually, but for our entire economy. “

The education department did not immediately respond to Insider’s request for comment.



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Profit margins will just worsen, lenders say https://pspbook.com/profit-margins-will-just-worsen-lenders-say/ https://pspbook.com/profit-margins-will-just-worsen-lenders-say/#respond Fri, 11 Jun 2021 21:14:21 +0000 https://pspbook.com/profit-margins-will-just-worsen-lenders-say/ The profit margin outlook for lenders declined in the second quarter of 2021, the third quarter in a row of pessimism on the earnings front, according to Fannie MaeQuarterly Mortgage Lender Sentiment Survey. According to the second quarter survey, 69% of lenders believe profit margins will decline over the next three months, up from 52% […]]]>


The profit margin outlook for lenders declined in the second quarter of 2021, the third quarter in a row of pessimism on the earnings front, according to Fannie MaeQuarterly Mortgage Lender Sentiment Survey.

According to the second quarter survey, 69% of lenders believe profit margins will decline over the next three months, up from 52% in the previous quarter. Only 19% think the profits will stay the same and 11% think the profits will increase. The drop represents the largest quarterly drop recorded since the survey began in 2014, Fannie Mae said this week.

Lenders have said they expect demand to buy mortgages, but demand will drop significantly on refis. The net share of lenders reporting negative demand growth over the next three months hit a net negative for the first time since the first quarter of 2019. In fact, it hit the lowest level since fourth quarter of 2018 for loans eligible for GSE and public loans. .

“Despite high optimism about the US economy, lenders are showing a cautious outlook for their mortgage business,” said Doug Duncan, chief economist for Fannie Mae. “Those who expected a lower profit margin continued to cite competition from other lenders and changes in market trends as the main reasons… With the shift from refinancing to buying, some lenders said transactions were purchases are more difficult to make and have lower margins.

Duncan noted that recent economic indicators are encouraging.

“Although the gap between primary and secondary mortgages has continued to narrow, it remains wider than the level seen before the pandemic, suggesting lenders are still making profits, but not as much as in 2020” , did he declare.

“Requests for purchase mortgages have declined slightly in recent weeks; however, they remain quite strong and above pre-pandemic levels, possibly due to still low mortgage rates, ”he said. “Our June National Housing Survey released earlier this week showed that consumer demand remains strong as “buying a home on the next move” is at an all time high, despite the challenges of accelerating home price appreciation and a insufficient supply. “

At Mortgage Bankers AssociationSpring virtual conference, speakers warned that shrinking profit margins could make conversations difficult between executives and loan officers.

“Trees don’t grow to the moon, and at some point the volume comes from refinances and the margin will tighten,” Michael McCauley, director of the mortgage advisory firm. Garrett, McAuley & Co., mentionned.

Lenders should prepare for a squeeze in margins “because it will likely be a lot worse” than in 2018, McAuley said. Except this time around, lenders in 2018 who aggressively priced loans “have a lot more retained earnings and a lot more resistance,” he said.



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