SeedlyTV EP07 - Seedly
 

SeedlyTV EP07

Have you considered adding P2P lending to your investment portfolio? Join us here on 27th June, 8 - 9pm!

46 
Questions answered

"How does it work? Is it safe?! How much should I invest monthly?" We gathered these P2P Lending founders all in one room to answer your burning questions. If you missed it, you can find out what was covered here!

  • What's happening at Seedly-- 0:40-2:15
  • Introduction of the 4 P2P Lending companies on board-- 2:40-8:40
  • Introducing Seedly Reviews!-- 9:20-10:09
  • Icebreaker-- 10:10-18:07
  • Why is there a need for P2P lending?-- 18:30-19:57
  • P2P Lending Promo Codes!-- 19:59-20:30
  • Why do borrowers choose to take alternative financing via your platform, when they could just take bank loan from banks?-- 21:00-25:45
  • Are there any cornerstone investors, sponsor, accredited investor, institutional investors who have taken up the P2P loans? If no, why not? -- 25:49-29:04
  • Why don't the P2P companies raise seed funding from venture capital or angel investors to put into the P2P loans?-- 29:30-35:10
  • Any P2P platform has a reputable listed company or blue chip company as a borrower?-- 35:14-36:25
  • I have a few defaults (won't mention which platform), still pending court process and recovery. Is there any hope of getting some back? Or is it totally lost?-- 36:46-41:35
  • What are the factors people should focus on when looking through the statistics of a P2P lending company?-- 42:21-43:05
  • There are so many platforms to choose from. What is the main feature that sets you apart from your competitors?-- 43:13-48:17
  • Are there any national statistics on the 2008-2009 crisis time default rates of SMEs or companies of similar profile on the P2P platforms?-- 48:50-53:15
  • What's the outlook on investing in P2P loans with cryptocurrency?-- 53:30-55:23
  • Why isn't there a requirement for companies to put up collateral for P2P loans? Such that in a default at least the collateral can help investors recover some investment back?-- 55:30-59:27

    Speakers:

- Getty Goh (CEO, CoAssets)

- Pawel Kuznicki (CEO, Capital Match)

- Ronnie Chia (Co-Founder, Minterest)

- Kelvin Teo (Co-Founder, Funding Societies)

- Kenneth Lou (Seedly Moderator)


NOTE: SeedlyTV is a series which will be covering topics via LIVE video and QnA on the Seedly platform. We will be inviting speakers to cover relevant topics in personal finance: Insurance, Debt, Saving, Spending and Investing. 

-This is a Seedly organised event-

Missed EP06? Watch it here: SeedlyTV EP06: CPF 101 With Mr Soh Chin Heng, Deputy Chief Executive of CPF

Remember to ask your questions in the QnA section below!

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SeedlyTV EP07

P2P Lending

SY
Samuel Yip
Level 3. Wonderkid
Updated on 27 Jun 2019
It depends on the platform. I have been with Funding Societies and default rate is about 1 to 3 per cent. Note that its higher with Moolahsense. One telling sign is that loans from moolahsense come with a higher interest rate. This is to compensate for the riskier loans on the platform.

SeedlyTV EP07

P2P Lending

Arun Pai
Arun Pai, Chief Kristals Officer at Kristal.AI
Level 4. Prodigy
Answered on 14 Nov 2019
Through personal experience that money is locked up until a debt collector employed by the P2P company (or they themselves) can retrieve it. Unlike larger bankruptcies where bond holders can expect some money back (be it cents on the dollar), in the case of P2P lending chances are quite a bit slimmer I would say.

SeedlyTV EP07

P2P Lending

Investments

I will just comment from what I know. I have just experienced my second defaults and have yet to retrieved them. There is no priority or anything for funding societies in case of defaults.. The money will be returned to those who participated the legal cases, followed by non participant. For p2p, I would refer to type of loans rather than classes of loan. Most are business loan or invoice financing or property - backed loan For minterest, have 'insurance-linked' loans For funding society, there is capital guarantee loan

SeedlyTV EP07

P2P Lending

Jin Wen Choo
Jin Wen Choo
Level 3. Wonderkid
Updated 2w ago
Hello! I’m Jin Wen from CoAssets Pte Ltd (“CoAssets”) and would love to give my two cents :) 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. 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: 1. Financial Performance Analysis and Macro & Micro Economic Analysis 2. Operational and Compliance Due Diligence a. Anti-money laundering and terrorist financing checks b. Adverse news checks c. Litigation checks 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”). Conclusion Overall, it is advisable Investors must do their own due diligence to determine if the products match their investment objectives and risk appetite. 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). For ease of reference, register your interest here: s.coassets.com/SxX I hope this helps!

SeedlyTV EP07

P2P Lending

Everything is possible. How detailed you want is very questionable. I would not want to read a 100 pages fact sheet just like reading annual reports in listed companies. As long as the fact sheet is enough for me to understand if the borrowers have the ability and willingness to return the loans. Also, if you want a very detailed factsheet, the fees will also be compromised. Transparency of the fact sheet of the P2P borrowers has been yearned by the the investors. There needs to be a compromise. If the P2P borrowers are not willing to make known of their companies to the investors, little can we do. I believe that Kenneth, funding societies, in seedlyTV EP07 has mentioned a unfortunate cases of a borrower wanting to pull out a borrower stories/video. The borrower's cilent is not willing to work with him because the funds outsourced are not from banks, and thereby illegal debt. Thus, I would like question if all debts are bad? And if we, a legal citizens in Singapore put in "dirty money"? The negative stigma of debt may bring more opportunity cost for business than borrowing. Left with no choice, they would want the p2p platforms not to disclose their infomation. Back to your question, I would still say yes. However, it is not possible if the borrowers wants to protect their identity, Hereby, I would appeal to the borrowers benefited by the P2P platforms and the communities to give a testimony how you have gained from these fintech platforms.

SeedlyTV EP07

Investments

P2P Lending

Kelvin Chin
Kelvin Chin
Level 5. Genius
Answered on 13 Nov 2019
Customer service and responsive to us is important too.

SeedlyTV EP07

P2P Lending

Investments

Kelvin Chin
Kelvin Chin
Level 5. Genius
Answered on 13 Nov 2019
Some loans have collaterals, some have their skin in the game. Not always transparent how much % the P2P companies chip in though. Taking it at face value.

SeedlyTV EP07

P2P Lending

Arun Pai
Arun Pai, Chief Kristals Officer at Kristal.AI
Level 4. Prodigy
Answered on 14 Nov 2019
There are in the US (lending club for example takes on a number of transactions on to its own books), and we will definitely see this taking place more prominently in Asia with the advent of debt focussed funds. Given the current state and relatively new creation of p2p platforms in asia though, the relative size of P2P market vs size of debt funds which tends to be a lot larger is causing the slow uptake.

SeedlyTV EP07

Investments

P2P Lending

General

Interesting question! Would love to hear opinions too. But if you're mentioning P2P investments in the context P2P lending, then I would base the risk component on the credit worthiness of the borrower. The Sharpe ratio uses volatility as a measure of risk (I personally think volatility is a flawed measure, but that's another story for another day!). But in P2P lending as an investment, you'll earn money if your interest is paid and your loan is repaid. So I think the best way to look at risk-adjusted return for P2P lending-investments will be for P2P lending platforms to release some form of the scoring system on credit-worthiness (volatility of income, interest coverage ratio, debt-to-equity ratio etc.). I'm not familiar with P2P investment platforms, so I hope this is a useful response!

SeedlyTV EP07

P2P Lending

Alex Chua Cheng En
Alex Chua Cheng En, Pcme at Anderson Junior College
Level 5. Genius
Answered on 09 Nov 2019
If you want to know how reputable listed company or blue chip comany are involved in p2p platform, I have some answer: 1. Funding societies are collaborating with the banks to help SMEs provide micro-loans. Seedin are also in partnership with OCBC bank 2. The owner of the invoice finance by a borrower is from SembComp, MBS,etc. Thus, the borrower may have late repayments may not be because of themselves but the credit partners the borrower are working with
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