The Growing Fintech Ecosystem: Sizing Up and Noting Trends ...

The Growing Fintech Ecosystem: Sizing Up and Noting Trends for the Non-Bank Market

John Hecht, Jefferies jhecht@ 415.229.1569

Agenda

Market Size & Trends Macroeconomic Update Key Topics for Fintech Lenders Regulatory Update Capital Markets Update Closing Thoughts

Market Size & Trends

Market Size & Trends|

Limiting factors to success are access to capital, business model constraints, and

resources - not the market size

Focus should be on building a platform which can take the business to the next

level

> $1 Trillion Total Addressable Market

Fintech lender penetration is now at a point where they can influence market factors - particularly in non-traditional

asset classes

Credit quality remains supportive, although reverting, as the macro-

backdrop is generally healthy

Market Size & Trends|

Avg. Loan Size Term

Interest Rate/APR

FICO Losses/Annualized NCOs TAM (Balances)

Small Dollar

$500 2 Weeks - 1 Month

300%+

550 2%-8%

L+200bps - L+1,400bps; Government loans UST10+

Varies, typically 30%-40%

spread and capped at 10.5%

670+ for private

NA

1.5%-3.5% for private

10%-15%

$762B

$1,300B

$250B

Source: Jefferies, Federal Reserve Bank of New York Household Debt & Credit Report, PeerIQ, S&P Global Market Intelligence 2017 Digital Lending Landscape, and public company data from ELVT, ENVA, and CURO. TAM is loan balance for all sub-sectors with the exception of Small Business which is based on loan volumes (Source: Federal Reserve, 1/2/18)

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