The Monday Roundup: what we are watching this week | August 15th

By Gaia Lamperti

The Monday Roundup sets the scene for the week’s biggest news stories, industry deals, and upcoming events. For Prime subscribers only.

Neobanks struggles

German neobank Nuri has filed for insolvency due to “significant macroeconomic headwinds and the cooling down of public and private capital markets” that affected the company’s liquidity. The Berlin-based bank said in a statement that filing for insolvency was “necessary to ensure the safest path forward for all our customers”. However, the action should not affect its services, customer funds or investments.

London-based challenger bank Dozens will end all operations by the end of the month after only launching in 2019. Its over 60,000 customers were notified to transfer their funds before the closure of the bank, which cited the “domino effect” of Covid, “less money in the system” and less funding to the consumer side of FinTech as the causes behind the decision.

Lending news

The British Business Bank announced the first five lenders that will be accredited under the new iteration of the government’s Recovery Loan Scheme (RLS). The government scheme provides lenders with a guarantee against some £4.5 billion worth of business loans in the wake of the Covid pandemic. According to the latest iteration of RLS lenders will be able to offer loans of up to £2 million to businesses with a turnover of up to £45 million. The British Business Bank  is now working to accredit a new list of lenders.

New guidelines for digital lending have been introduced by India’s central bank in order to improve transparency and data protection, after the country saw a sharp rise in the number of digital lending startups encouraging improved access to credit. The Reserve Bank of India (RBI) set up a working group, which has now reported back with recommendations to firm up the regulatory framework. For example, they suggest that only regulated entities such as banks will be permitted to disburse and collect re-payments on loans, cutting out third parties. Meanwhile, lenders must display all inclusive costs of the digital loan as an annual percentage rate upfront and get consent from borrowers before increasing credit limits.

Where is the buzz

A new FinTech-focused growth fund has been designed to plug a £2 billion funding gap in the UK’s financial technology sector, as highlighted in the Kalifa Report earlier this year. Reportedly, former chancellor Philip Hammond is set to serve on its advisory board, according to Sky News. The fund will be independent from the government, raising capital from institutional investors to pump money into UK fintechs beyond the Series B stage and looking to scale, in an effort to tackle “a £2 billion FinTech growth capital funding gap.”