P2P Crowdfunding Platform Comparison Singapore-01
< BACK TO MAIN BLOG

P2P Lending Platforms 2018: Funding Societies vs MoolahSense vs Capital Match vs CoAssets vs Minterest

5 min read

Peer-to-peer (P2P) Crowdfunding Platform: Solving Issues with SME Loans

One common challenge when running any business is funding. For young businesses especially, getting loans through the banks can be a challenging due to a few reasons:

  • The lack of collateral (necessary for bank loans)
  • Young credit history (which makes banks reluctant to loan)
  • Imperfect financial record
  • Long processing time

With peer-to-peer lending platforms in place, small businesses now have a new avenue to turn to, when in need of funding.

How Peer-to-Peer Crowdfunding platform works?

how P2P crowdfunding platforms work in Singapore

  • P2P lending platforms connect the public to businesses in need of funding.
  • Public investors can lend money to these businesses and get returns based on interest rates when borrowers repay the loans.

Pros and cons of investing in P2P lending

Pros

  • Low Barrier of Entry: Low investment commitment (minimum investment of S$100, or less for some platforms)
  • Diversification: Alternative investment products to diversify your portfolio
  • Returns: Attractive returns of more than 10% usually (higher than inflation)
  • Monthly Returns: Investment principal with interest earned returned to investors on a monthly basis.

Cons

  • High Risks: Given that the loans are for SMEs, there is a risk that investor lose their investment when the company defaults on payment
  • Platform risk: If the platform (the middleman) you invest in closes down, your investments will not be managed effectively

Read User Reviews  

With our amazing community members, we have come together to write user reviews in a simple way understand covering the pros and cons of each product and returns. 

Important Note: We are NOT sponsored for writing about any P2P Lending Platforms.

Read User ReviewsP2P Crowdfunding Platform Comparison Singapore-01

While having the lowest charges can be one of the considerations for your investment, there are definitely more factors to consider. Hence, real user reviews will definitely give a whole lot more insights to each product before you make a decision on the platform of your choice.

 

Players: Moolahsense, Funding Societies, CoAssets, Capital Match, Minterest

All the mentioned platforms are regulated by the Monetary Authority of Singapore (MAS). They were issued with Capital Markets Services License.

We tried out all their onboarding process, and they are generally quite easy and does not take up much time.

*Disclaimer: P2P investing is a high-risk investment. This article does not constitute as financial advice but rather is seen as an unbiased comparison between some of the P2P Platforms in Singapore.

Funding Societies

  • History: Kelvin Teo and Reynold Wijaya founded Funding Societies in 2015 while studying for their MBA at Harvard. Prior to Funding Societies, Kelvin is a management consultant at Accenture and McKinsey & Co., while Reynold is a leading executive in a family business conglomerate in Indonesia.
  • Funding: US$7.5 million Series A. Investors include Alpha JWC Ventures and Sequoia Capital
  • Interface: Modern, clear and rather easy to use.
  • Has a statistics page to allow a quick overview of some of their numbers.
  • Pricing: 18% of the interest rate earned from investors
  • Loans funded: $70.5 million as of 11 October 2017
  • Rate of default: Lowest default rate of 1.28% as of 15 March 2018. This is, however, a combination of all the countries they operate in and we believe that Indonesia might have bumped up the number a little.
  • Risk Management:
    Borrowers:
    Assessment culminates in an FS Scoring Grade which is a rating of opinion on both the business’ and their owners’ capacity and willingness to repay the loan. Personal guarantor (usually company directors) is required.
    Platform: Funding Societies holds the investors’ funds in a trust account. Should they become insolvent one day, the funds will continue to be handled by an escrow agency, Vistra. Loan agreements in place will continue to be valid and a reputable agency will be assigned to fulfill the service duties.
  • Skin in the game: Funding Societies’ founders invest a bit of their money in every loan they dispatch.

Read Funding Societies User Reviews

MoolahSense reviews

MoolahSense

  • History: First crowd-financing campaign in year 2014. Founded by Lawrence Yong who was a Vice President at Macquarie Capital before he founded MoolahSense.
  • Funding: Undisclosed. Seed round led by East Ventures and Pix Vine Capital.
  • Interface: Modern, clear and easy to use
  • Has a statistics page to allow a quick overview on some of their numbers.
  • Best Pricing: 1% on repayment.
  • Loans funded: $37.9 million as of 11 October 2017
  • Rate of default: 3.48%
  • Risk Management:
    Borrowers: 
    Credit assessment model that assesses potential Issuers according to the nature and outlook of the industry they operate in, the strength of their financials and overall business model as well as the background and character of its Directors.
    Platform: Should Moolah Sense become insolvent one day, DP Information Group to transfer servicing function to ensure that investors continue to receive monthly repayments on the loans that have been dispatched.

Read MoolahSense User ReviewsCapital Match Reviews

Capital Match

  • History: Established in 2014 to create a more inclusive channel for companies to access debt financing and for investors to generate strong fixed-income returns. Founded by Pawel Kuznicki who was a tech entrepreneur with venture development before founding Capital Match.
  • Funding: Raised US$710K from Series A in August 2015. Investors include Innosight Ventures, Crystal Horse Investments, CE-Tech Invest.
  • Interface: More heavy on numbers, fewer graphics.
  • Best Pricing: The price quote on the platform to investors are net of fees. The net interest (net of all fees) per loan from 14% to 35% annualized with an average net interest of 22%.
  • Loans funded: $54.6 million as of 11 October 2017
  • Rate of default: 5%. Take note that Capital Match is on invoice financing, hence a rate of below 5% is rather healthy.
  • Risk Management:
    Borrowers:
    Invoice financing offers more secured arrangement over unsecured loans. Only invoices issued to large debtors (corporates, government entities etc.) are accepted, and Capital Match always verifies invoices and in most cases redirect the payment from a large debtor to our bank account. This allows Capital Match a high level of control of the repayments.
    Platform: Should Capital Match become insolvent one day, investors continue to receive monthly repayments on the loans that have been dispatched.

Read Capital Match User Reviews

CoAssets

CoAssets

  • History: Established in 2013, CoAssets is Southeast Asia’s first public listed crowdfunding site with offices in Singapore, Australia, Malaysia, China and Indonesia. Founded by Getty Goh who founded Ascendants Assets Pte Ltd, a real estate research firm before founding CoAssets.
  • Funding: Listed on the Australian Securities Exchange (ASX)
  • Interface: Modern, clear and rather easy to use.
  • Best Pricing: 0% on investors. Charges 3%-5% on the fund raised.
  • Loans funded: $9.5 million as of 31 August 2017
  • Rate of default: 1.47% write off rate.
  • Risk Management:
    Borrowers:
     Investors’ funds are held by a licensed escrow agent. Should they become insolvent one day, the funds will continue to be handled by an escrow agency. Loan agreements in place will continue to be valid and a reputable agency will be assigned to fulfill the service duties.
    Uses CoAssets Risk Assessment Model (CRAM) that was developed together with Ernst & Young (EY) to evaluate the companies they dispatch loans to. 
    Platform: Should CoAssets become insolvent one day, investors continue to receive monthly repayments on the loans that have been dispatched.

Read CoAssets User Reviews

Minterest

Minterest

  • History: Recently recognised as the top 25 Fintech Companies in Asia in 2017 by APAC CIO Outlook, Minterest is founded by a team of former bankers. Founded by Charis Liau and Ronnie Chia whom both worked together in the same bank for more than 10 years. 
  • Funding: Founders and seed investors
  • Interface: Modern, clear and rather easy to use.
  • Best Pricing: 0% on investors.
  • Loans funded: $11.3 million as of 24 March 2018
  • Rate of default: 0% so far on public listed deals. 
    (Note: Loans are considered default after 2 months of non-payment)
  • Risk Management:
    Borrowers:
    Minterest has its proprietary credit assessment model that reflects both quantitative and qualitative factors taking into account business and financial risks of each borrower and their respective financing requirements. Data is also sourced from third party independent information providers (eg. Dun & Bradstreet, Credit Bureau Singapore) etc. More than 200 data points are processed through their proprietary model to generate a MintGrade rating.
    Platform: Minterest holds the investors’ funds in a trust account. Should they become insolvent one day, the funds will continue to be handled by an escrow agency, Vistra. Loan agreements in place will continue to be valid and a reputable agency will be assigned to fulfill the service duties.

Read Minterest User Reviews

 

 

Tips for P2P Investing

Should one decides to invest in any of the P2P platforms, do take note:

  • P2P investing is a high-risk investment. Only invest in the portion of your money set aside for risky investments.
  • Always diversify when investing in P2P. Eg. Instead of throw all of your S$1,000 into one company on the platform, split them up into 10 companies of S$100 each.
  • Diversify your investment into companies across different industries.

Check out our blog for more unbiased opinions on your personal finance journey.

Like what you see? Follow us on Facebook and Telegram. Show us some love!

Comments