How do the P2P platforms do checks on borrowers?

Hello! I’m Jin Wen from CoAssets Pte Ltd (“CoAssets”) and would love to give my two cents :)

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What's the purpose of due diligence?

The main risk that comes with P2P lending is the default risk which is defined as the risk of the Investor- Opportunity Provider (“OP”) defaulting on repayments in full or in part. Default risks cannot be eliminated. However, CoAssets performs comprehensive due diligence on borrowers. The purpose of due diligence is to uncover risks (including default risk) and disclose such risks to potential investors. This is to ensure that the investors are equipped with information to make a decision.

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Risk Assessments performed on OP

Just to share with you, CoAssets conducts risk assessment on potential OPs.

Risk assessment is not to eliminate risk, but to evaluate and manage risks to ensure that the relevant materials and disclosures can be made to investors to a reasonable extent. Here are the 3 factors that CoAssets uses to assess a deal:

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1. Financial Performance Analysis and Macro & Micro Economic Analysis

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2. Operational and Compliance Due Diligence

a. Anti-money laundering and terrorist financing checks

b. Adverse news checks

c. Litigation checks

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3. Continuous Risk Monitoring & Review

Even after the online funding project is successfully funded and disbursed, we may continuously monitor risk factors that are material to the project. CoAssets Pte. Ltd. may collect ongoing financial records or other business documents to evaluate the performance and check if the project is progressing as per proposed by Opportunity Provider (“OP”).

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Conclusion

Overall, it is advisable Investors must do their own due diligence to determine if the products match their investment objectives and risk appetite.

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If you like to find out more on what risk analysis model P2P platforms like us use to evaluate projects listed on the platform, CoAssets team is hosting an educational seminars on the 5th of December, Thursday, 7pm-9pm, at CoAssets office (OUE Downtown 1).

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For ease of reference, register your interest here: s.coassets.com/SxX

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I hope this helps!

Every P2P platforms have their own unique credit risk assessment but still fundamentally, they are the same such as IRAS, site visiting, check their cash flow ,etc.

Still, as a lender, we have the choice to diversify and not overload on a borrower. I usually overload when my values and checks are in line with the borrower so it will be great that borrowers are willing to be more transparent in their business. This is so that the lender are more willing to place the $$ with you, knowing that you will make good use of the money borrowed