Fasanara Fintech Weekly

How Fintech Overcomes Barriers, Fintech Lending Effects on SMEs, DeFi Utopia & More




Happy Friday!



In this edition:


  • Three barriers unbanked citizens face and how fintech overcomes them

  • Why DeFi utopia would be finance without financiers

  • The real effects of fintech lending on small and medium-sized enterprises

  • London takes top spot on European fintech occupier index

  • Unique DeFi innovation through decentralized bonds: what are they?




 


Three barriers unbanked citizens face and how fintech overcomes them.



It’s difficult to find exact numbers on how many people in the U.S. are unbanked or underbanked. But even before the pandemic, the Federal Deposit Insurance Corporation estimated that about 25% of Americans either didn’t have a bank account at all or were unable to get the full array of financial services they need to establish credit and put savings aside.


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Why DeFi utopia would be finance without financiers: QuickTake.



Banking has always meant bankers, the intermediaries who are trusted to arrange financial transactions and are responsible for their safe execution. But what if nobody were in the middle, just some computer code? That’s the goal of what’s known as decentralized finance, or DeFi, a movement that’s grown out of a decade of experimentation with cryptocurrencies and the blockchain technology behind them. A DeFi world in which counterparties interact directly via so-called smart contracts would be more efficient and fair, its proponents say. Critics say that DeFi is just the latest instalment of the hype, speculation and money-losing possibilities that surround crypto. Now a global anti-money-laundering watchdog has challenged DeFi’s central premise that transactions can take place without any entity being responsible for them.


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The real effects of fintech lending on small and medium-sized enterprises.




The rapid growth of FinTech platforms creates challenges and opportunities for financial markets. This column uses a new dataset from a Portuguese FinTech platform to study the determinants of lending demand and the consequences of FinTech loans for small and medium-sized enterprises. It finds that FinTech lending caters mainly to larger SMEs, with higher profitability and a lower credit risk. Additionally, it shows that firms increase assets, employment, and sales following an approved FinTech loan. Finally, FinTech lending allows firms to diversify their pool of lenders and reduce exposure to shocks in the banking system.


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London takes top spot on European fintech occupier index.



London has attracted more than €18 billion (£15.4 billion) of fintech venture capital funding over the past five years, and is at the top of a new European rankings table. The capital has retained its spot at the top of property agent Savills’ European fintech occupier index. The study ranks the most attractive cities for fintech occupiers in Europe, and looks at factors including business environment and affordability.


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Unique DeFi innovation through decentralized bonds: what are they?



Bonds are one of the most popular and oldest kinds of investment. Bonds represent debt in which a company borrows money from another party, typically with interest payments over a set period. In cryptocurrency, bonds have taken a new form through DeFi. DeFi is made up of technologies that enable lending, borrowing, hedging, and other financial services.

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