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P2P Lending

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SeedlyTV EP07

P2P Lending

Hi Anon! SMEs in Singapore, commonly referred to as the 'backbone' of our society, account to 99% of Singapore companies, and contribute to 50% of the nation's GDP). Local P2P lending platforms offering SME lending, continue to fill this important gap in society -- providing credit-worthy MSMEs with customised financing solutions for their growth, expansion and cash-flow optimisation, with the funds contributed by investors (both individual and institutional) who are of a suitable risk appetite, through debt crowdfunding. P2P platforms, taken together, present an array of funding opportunities to serve these local businesses. In light of your words, the potential for consumer lending via debt crowdfunding does exist, given its prevalence in Europe and the US. In Singapore, however, there exist stringent regulations to protect (consumer) borrowers in Singapore by Ministry of Law (instead of the Monetary Authority of Singapore, which regulates crowdfunding for financial instruments under a different set of regs), which consumer financing/lending comes under. To this end, they have closely regulated this industry, having recently awarded 6 companies with specific licenses) to provide data-driven personal lending (which in itself does not regulate consumer financing through crowdfunding by P2P platforms). Some other inquisitive P2P investors have in fact, like you, discussed the possibility too, alongside one of the representatives from Minterest here)! Assuming the regulatory hurdle is cleared, it ultimately boils down to the platform's chosen target market (e.g. one of Funding Societies' main focuses is to impact societies through the empowerment of SMEs). Hope I was able to address your concerns! Feel free to voice your opinions on this, happy to discuss further.

SeedlyTV EP07

P2P Lending

Investments

Terence Tan, CMT
Terence Tan, CMT, Head of Education at IG Asia
Level 1. Freshie
Answered 1d ago
There will always be risks involved, and higher so for P2P lending. Always go in with your eyes open, diversify instead of putting your eggs into just a few baskets, and expect some negative surprises in a small percentage of the P2P deals.

SeedlyTV EP07

P2P Lending

Loans

Investments

Hi Gabriel, pleased to meet you - your responses & questions have been great learning for me personally! Kaeley here, I'm the Community Manager from Funding Societies! 👋 Have you reached out to the said platform on the slow updates yet? I'd like to share with you a related opinion piece, contributed by one of our investors on our blog - link here! He delved into detail on why a loan default may not result in a 100% wipeout of one's principal. Would love to hear your thoughts on this! Separately, you may also interact with him here on the topic, alongside other FS investors. Do let me know if it helps! :)

SeedlyTV EP07

P2P Lending

Investments

Fan ZD
Fan ZD, Employee at A Bank
Level 3. Wonderkid
Answered 1d ago
For one, Funding Societies I know has skin in the game. MoolahSense does not.

SeedlyTV EP07

P2P Lending

Fan ZD
Fan ZD, Employee at A Bank
Level 3. Wonderkid
Updated 1d ago
I speak from personal experience with both Funding Societies and MoolahSense. Both of them give some basic information in fact sheets for each loan - so that perhaps answers the first part of your question. As to the second part of your question - "all" information is not likely to happen. For example, Funding Societies does not reveal the name of the borrower (last I remember). Basic information about their financial situation at the point of the loan may be given, but if such information is revealed, it will usually be priced into the higher/lower interest rate. I suggest that, unless you are an insider or are somehow able to gain inside knowledge on how well the company is doing, if you do engage in the loans, it would be more useful to consider the frequency/percentage of defaults of each PORTAL, and the type/sector in the loans occur. In that way you can choose the portal correctly, and further adjust your preferences according to the type/sector of the loans.

Investments

Funding Societies

P2P Lending

Kenny Tan
Kenny Tan
Level 2. Rookie
Answered 5d ago
What i am very sure is that funding societies is not 0% default rate. I have invested over 150 campaigns with them. currently I have 7 loans defaulted, and no regular update from funding societies on how they are recovering the funds. FYI, my portfolio is in red.

SeedlyTV EP07

Investments

P2P Lending

Minterest

CoAssets

Capital Match

Funding Societies

I'm writing answers on a Sunday whilst traveling around Singapore for an appointment, so hello Zhi Rong. It's hard to comment on Minterest and Capital March, since I've never spoken to them. I was fairly impressed with the Funding Societies crowd at the Seedly Convention, they seemed to really know their stuff, which is important. CoAssets tends to be a bit more personal, which is good if you like Consultants. It's not like there's an additional price for talking to them, anyway. I've not found their yields to be as high as I would like, but they do tend to have decent safety measures in place. SeedIn is similar to CoAssets but in a more impersonal way - its almost entirely digital and you have to DIY it. There are obvious pros and cons to this, but some people would be very comfortable and find it very efficient to do so compared to a longer sales pitch. Most importantly, all 3 platforms have claimed to have 0% default so far, even with the updated definition for default. If I'm not wrong (I could be), default refers to both Time and Return on Investment, and nothing to do with whether it actually defaults or not. So you have a traditional definition for default: 1) Failure to repay loan according to the required payment on their debt obligation And then you have the P2P definition 1) Failure to repay loan regardless of the initial requirement payment structure within a specific time frame (3 - 6 months). The definition difference suggests that what does tend to happen is that P2P companies do actually default on their loans in the traditional sense. As you may know, Bonds are technically not security backed (e.g. its not like a mortgage where they can take your house away). But P2P platforms like CoAssets/SeedIn/FS do have measures to do something similar even if that isn't TECHNICALLY the case, so a P2P company will typically end up finding a new way to pay for the loan and within the period I stated (within 3 - 6 months). To me, that's the primary reason why anyone should invest in P2P - how effectively they keep their default rate and the methodology for doing so. That is why you should choose a particular company over their competitors. Look at that long answer. Do your own due dillgence, but drop me a message if you'd like! (haha) https://www.facebook.com/luke.ho.54 Luke

SeedlyTV EP07

P2P Lending

Here are my guess: Funding from the government Family and friends Own savings Unlicensed money lender Crowdfunding Anyway the limitations are either high interest rate or slow process

SeedlyTV EP07

P2P Lending

Investments

Fan ZD
Fan ZD, Employee at A Bank
Level 3. Wonderkid
Updated 1w ago
As far as I know both Funding Societies and Moolahsense have them. Turning them on gives you priority over those who subscribe/invest manually.

SeedlyTV EP07

P2P Lending

Fan ZD
Fan ZD, Employee at A Bank
Level 3. Wonderkid
Answered 2w ago
Honestly, I find the fact sheets meaningless. What's more important is the rate of defaults for the P2P platform, whether they do their due diligence well in the first place. If they don't, no matter how informative their fact sheet is, you wil still likely incur a loss through defaults.
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