• About
  • Advertise
  • Write For Us
  • Privacy Policy
  • Contact Us
Subscribe
Smart Investor Malaysia
Advertisement
  • Start Here
    • All
    • Guides
    • How-Tos
    • Analysis

    PropertyGuru: Malaysian Residential Property Market Continues To Face Challenges As Supply And Demand Declines

    Fed Turns The Tide In War On Inflation, But It’s Too Early To Declare Victory

    The Smart Investor’s Guide to Insurance

    Highlights: Malaysia’s Revised Budget 2023

    4 Reasons Why You Need To Invest In ETF

    SPY vs SPUS: A 2023 Comparison of S&P 500 ETFs

    It's time to embed ESG into your investment portfolio. | Credit: nattanan23 via Pixabay

    The Smart Investor’s Guide to ESG

    (L-R) Kenny Yee, Head of Research and Thong Pak Leng, Vice President of Equity Research

    Post 2023 Budget And Q4 Market Outlook Commentary By Rakuten Trade

    Image by dashu83 on Freepik

    Why This Economic Cycle Is Different?

    • Guides
    • How-Tos
    • Analysis
  • Investments
    • All
    • Asset Management
    • Stocks
    • Islamic Finance
    • Alternatives Investments

    Malaysia’s dance with FAANG Giants

    AIIMAN menjalin pakatan strategik dengan Bank Islam sebagai Rakan Pengedar Untuk Luaskan Capaian Kepada Produk Kekayaan Syariah

    E-mail Popup Warning Window Concept

    ICMR Research Series: Safeguarding Malaysian Investors Against Financial Scams

    How Is The Malaysian Property Industry Doing Post-Covid?

    What Can We Learn From The “Equity Risk Premium” About The Prospects For Equities Vs Bonds

    SC-Bursa: Measures To Boost Capital Market Vibrancy And Competitiveness

    Still Worth Investing In Sustainability In 2023?

    ICMR Research Series: Unexpected Life Situations And Industry Issues Drive Vulnerability For Malaysian Investors

    Bursa Malaysia Expands “Approved Securities” Criteria To Boost Market Vibrancy

    • Asset Management
    • Stocks
    • Islamic Finance
    • Alternatives Investments
  • Personal Finance
    • All
    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance

    Property Tussle: Being Left Homeless After Sister’s Death

    Employment Opportunity Fraud Syndicate: Lidt Cooperation Advertising Sdn Bhd Or Lidl Cooperation Advertising Sdn Bhd

    What You Need To Know About The Insurance Industry In Malaysia

    5 Rules For Malaysians To Improve Their Financial Wellbeing

    Tears In Heaven: Who Protects Your Insurance Money?

    Patterns And Types Of Cybercrime In Malaysia From 2016 To 2021: Part 2

    Patterns And Types Of Cybercrime In Malaysia From 2016 To 2021: Part 1

    ICMR Research Series: Millennials And Gen Z Must Plan Early For A Better Retirement In A Changing World Of Work

    The State Of Malaysia’s Education And Financial Literacy Among The Youths

    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance
  • Enterprise
    • All
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    From left Eizzar Supiar, AVP - Evaluation, Cradle_ Adlin Yusman, Co-Founder of BeMalas_ Suthenesh Sugumaran, Co-Founder of BeMalas_ and Joyce Wee, Former Executive Director of Etalage

    Cradle Circle: Bridging Visionary Startups and Investors in Second Series Event

    Gorgeous Geeks Marks 15 Years of Empowering Women in Technology

    MDDA Celebrates 30 Years of Industry Excellence

    DNA Mapping, A Revolutionary Medical Breakthrough

    Thomson Ushers In New Treatment for Spinal Muscular Atrophy

    Authority Institute’s Maverick Foo named Vistage Malaysia’s Speaker of the Year

    Digital Niaga Empowers Local Businesses With Digital Access To Financial Solutions for Micro, Small Medium Enterprises’ (MSMEs)

    Bizsu: On A Mission To Cool Down The World And Save The Environment

    Management team of Web Bytes Sdn Bhd (from L-R) at the Launch of Xilnex Retail Tech Experience Center: Ng Tiong Kuan, COO; Lee Ming Kew, CFO; Ooi Boon Sheng, CEO; Eng Aik Kian,  CTO (far right); Tan Wei Kit, Business Development Director (2nd from right) with Lee Kah Hin Jerry, Chief Investment Officer of GD Express Bhd (4th from right) and Ken Phua, Deputy President of MRCA (3rd from right)

    Web Bytes Unveils Wonders Cafe As The Hub For Xilnex Retail Tech Experience Center

    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    • Fintech
  • Property
    • All
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    From left Eizzar Supiar, AVP - Evaluation, Cradle_ Adlin Yusman, Co-Founder of BeMalas_ Suthenesh Sugumaran, Co-Founder of BeMalas_ and Joyce Wee, Former Executive Director of Etalage

    Cradle Circle: Bridging Visionary Startups and Investors in Second Series Event

    Gorgeous Geeks Marks 15 Years of Empowering Women in Technology

    MDDA Celebrates 30 Years of Industry Excellence

    DNA Mapping, A Revolutionary Medical Breakthrough

    Thomson Ushers In New Treatment for Spinal Muscular Atrophy

    Authority Institute’s Maverick Foo named Vistage Malaysia’s Speaker of the Year

    Digital Niaga Empowers Local Businesses With Digital Access To Financial Solutions for Micro, Small Medium Enterprises’ (MSMEs)

    Bizsu: On A Mission To Cool Down The World And Save The Environment

    Management team of Web Bytes Sdn Bhd (from L-R) at the Launch of Xilnex Retail Tech Experience Center: Ng Tiong Kuan, COO; Lee Ming Kew, CFO; Ooi Boon Sheng, CEO; Eng Aik Kian,  CTO (far right); Tan Wei Kit, Business Development Director (2nd from right) with Lee Kah Hin Jerry, Chief Investment Officer of GD Express Bhd (4th from right) and Ken Phua, Deputy President of MRCA (3rd from right)

    Web Bytes Unveils Wonders Cafe As The Hub For Xilnex Retail Tech Experience Center

    • First Time Home Buyers
    • Central
    • Northern
    • Southern
    • Sabah & Sarawak
    • Regional / Global
    • Feature
  • ESG
  • Lifestyle
  • News & Events
  • Bahasa Melayu
No Result
View All Result
  • Start Here
    • All
    • Guides
    • How-Tos
    • Analysis

    PropertyGuru: Malaysian Residential Property Market Continues To Face Challenges As Supply And Demand Declines

    Fed Turns The Tide In War On Inflation, But It’s Too Early To Declare Victory

    The Smart Investor’s Guide to Insurance

    Highlights: Malaysia’s Revised Budget 2023

    4 Reasons Why You Need To Invest In ETF

    SPY vs SPUS: A 2023 Comparison of S&P 500 ETFs

    It's time to embed ESG into your investment portfolio. | Credit: nattanan23 via Pixabay

    The Smart Investor’s Guide to ESG

    (L-R) Kenny Yee, Head of Research and Thong Pak Leng, Vice President of Equity Research

    Post 2023 Budget And Q4 Market Outlook Commentary By Rakuten Trade

    Image by dashu83 on Freepik

    Why This Economic Cycle Is Different?

    • Guides
    • How-Tos
    • Analysis
  • Investments
    • All
    • Asset Management
    • Stocks
    • Islamic Finance
    • Alternatives Investments

    Malaysia’s dance with FAANG Giants

    AIIMAN menjalin pakatan strategik dengan Bank Islam sebagai Rakan Pengedar Untuk Luaskan Capaian Kepada Produk Kekayaan Syariah

    E-mail Popup Warning Window Concept

    ICMR Research Series: Safeguarding Malaysian Investors Against Financial Scams

    How Is The Malaysian Property Industry Doing Post-Covid?

    What Can We Learn From The “Equity Risk Premium” About The Prospects For Equities Vs Bonds

    SC-Bursa: Measures To Boost Capital Market Vibrancy And Competitiveness

    Still Worth Investing In Sustainability In 2023?

    ICMR Research Series: Unexpected Life Situations And Industry Issues Drive Vulnerability For Malaysian Investors

    Bursa Malaysia Expands “Approved Securities” Criteria To Boost Market Vibrancy

    • Asset Management
    • Stocks
    • Islamic Finance
    • Alternatives Investments
  • Personal Finance
    • All
    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance

    Property Tussle: Being Left Homeless After Sister’s Death

    Employment Opportunity Fraud Syndicate: Lidt Cooperation Advertising Sdn Bhd Or Lidl Cooperation Advertising Sdn Bhd

    What You Need To Know About The Insurance Industry In Malaysia

    5 Rules For Malaysians To Improve Their Financial Wellbeing

    Tears In Heaven: Who Protects Your Insurance Money?

    Patterns And Types Of Cybercrime In Malaysia From 2016 To 2021: Part 2

    Patterns And Types Of Cybercrime In Malaysia From 2016 To 2021: Part 1

    ICMR Research Series: Millennials And Gen Z Must Plan Early For A Better Retirement In A Changing World Of Work

    The State Of Malaysia’s Education And Financial Literacy Among The Youths

    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance
  • Enterprise
    • All
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    From left Eizzar Supiar, AVP - Evaluation, Cradle_ Adlin Yusman, Co-Founder of BeMalas_ Suthenesh Sugumaran, Co-Founder of BeMalas_ and Joyce Wee, Former Executive Director of Etalage

    Cradle Circle: Bridging Visionary Startups and Investors in Second Series Event

    Gorgeous Geeks Marks 15 Years of Empowering Women in Technology

    MDDA Celebrates 30 Years of Industry Excellence

    DNA Mapping, A Revolutionary Medical Breakthrough

    Thomson Ushers In New Treatment for Spinal Muscular Atrophy

    Authority Institute’s Maverick Foo named Vistage Malaysia’s Speaker of the Year

    Digital Niaga Empowers Local Businesses With Digital Access To Financial Solutions for Micro, Small Medium Enterprises’ (MSMEs)

    Bizsu: On A Mission To Cool Down The World And Save The Environment

    Management team of Web Bytes Sdn Bhd (from L-R) at the Launch of Xilnex Retail Tech Experience Center: Ng Tiong Kuan, COO; Lee Ming Kew, CFO; Ooi Boon Sheng, CEO; Eng Aik Kian,  CTO (far right); Tan Wei Kit, Business Development Director (2nd from right) with Lee Kah Hin Jerry, Chief Investment Officer of GD Express Bhd (4th from right) and Ken Phua, Deputy President of MRCA (3rd from right)

    Web Bytes Unveils Wonders Cafe As The Hub For Xilnex Retail Tech Experience Center

    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    • Fintech
  • Property
    • All
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    From left Eizzar Supiar, AVP - Evaluation, Cradle_ Adlin Yusman, Co-Founder of BeMalas_ Suthenesh Sugumaran, Co-Founder of BeMalas_ and Joyce Wee, Former Executive Director of Etalage

    Cradle Circle: Bridging Visionary Startups and Investors in Second Series Event

    Gorgeous Geeks Marks 15 Years of Empowering Women in Technology

    MDDA Celebrates 30 Years of Industry Excellence

    DNA Mapping, A Revolutionary Medical Breakthrough

    Thomson Ushers In New Treatment for Spinal Muscular Atrophy

    Authority Institute’s Maverick Foo named Vistage Malaysia’s Speaker of the Year

    Digital Niaga Empowers Local Businesses With Digital Access To Financial Solutions for Micro, Small Medium Enterprises’ (MSMEs)

    Bizsu: On A Mission To Cool Down The World And Save The Environment

    Management team of Web Bytes Sdn Bhd (from L-R) at the Launch of Xilnex Retail Tech Experience Center: Ng Tiong Kuan, COO; Lee Ming Kew, CFO; Ooi Boon Sheng, CEO; Eng Aik Kian,  CTO (far right); Tan Wei Kit, Business Development Director (2nd from right) with Lee Kah Hin Jerry, Chief Investment Officer of GD Express Bhd (4th from right) and Ken Phua, Deputy President of MRCA (3rd from right)

    Web Bytes Unveils Wonders Cafe As The Hub For Xilnex Retail Tech Experience Center

    • First Time Home Buyers
    • Central
    • Northern
    • Southern
    • Sabah & Sarawak
    • Regional / Global
    • Feature
  • ESG
  • Lifestyle
  • News & Events
  • Bahasa Melayu
No Result
View All Result
Smart Investor Malaysia
No Result
View All Result
Advertise with Smart Investor Advertise with Smart Investor Advertise with Smart Investor
Home Investments

P2P Financing: The Next Frontier of Retail Investment?

Funding Societies has made impressive inroads into the Malaysian financial industry with its investor first, business friendly approach.

3 years ago
in Investments, Alternatives Investments
0
p2p financing funding societies

Image from p2pempire.com/

0
SHARES
1
VIEWS
Share on FacebookShare on Twitter
Subscribe to Smart Investor E-Magazine Subscribe to Smart Investor E-Magazine Subscribe to Smart Investor E-Magazine

The new year always brings with it hope and a positive outlook for a fresh start. This is especially true for those with investments and other financial goals that they want to achieve. With the Covid-19 pandemic showing no signs of letting up, many retail investors dove into the stock market headfirst, snapping up trending stocks like hotcakes and selling them equally fast when the tides began turning.

Alternative investments like robo-advisors, cryptocurrency and peer-to-peer (P2P) financing have also proved popular, with many attracted by the higher risk, higher reward model offered by these financial products. This is a point not lost on Wong Kah Meng, the co-founder and CEO of Funding Societies, a P2P financing platform that connects retail investors to SMEs.

“The top concerns facing investors when it comes to making investment decisions include low returns, long investment tenure, and being a research-intensive process,” he says.

“P2P financing platforms such as Funding Societies mitigate these concerns. For instance, investors on our platform can easily invest in local SMEs across various sizes and industries and earn higher risk-adjusted returns through SMEs.”

The low barrier to entry means that such platforms are easily accessible to retail investors, where investors as young as 21 years old can get started on their investment journey from as low as RM100. Users are also urged to diversify their investment portfolios in order to spread the risk across multiple small-medium enterprises (SMEs); it is for this reason that Funding Societies adopted a low minimum investment, so investors can diversify across multiple notes.

This follows the age-old rule of not putting all your eggs into one basket. Although default rates are currently low, the chance of an SME failing to fulfil obligations to investors remains due to market risks such as unemployment rates, interest rates and economic recession.

The company helps to facilitate this diversification by offering a range of investment products. These include business term financing, accounts payable financing, accounts receivable financing, and dealer financing.

P2P Financing Performance to Date

Having first launched in 2017, the P2P financier has come a long way in a relatively short time. To date, it has disbursed over RM500 mil in Malaysia and over RM5 bil regionally while maintaining a low default rate of just 1.4% to date. Although default rates were below 1% prior to the Covid-19 outbreak, the current number is lower than the 2.3% default rate back in 2017.

Such numbers bode well for the future, especially with retail investors turning to alternative investments in greater numbers. However, Wong believes that education remains the foremost priority to establish P2P financing as not just an alternative investment, but a legitimate financing and investing platform.

“To this end, we are still pushing for public education through participations in financial literacy seminars and industry conferences with the aim to drive thought leadership, not only in Malaysia, but also across the Southeast Asia region that we operate in,” he says.

Business Enablers, Economic Catalysts

While the barrier to entry is low for retail investors, Funding Societies holds the SMEs seeking to raise funding on their platform to a higher standard. Businesses come in all shapes and sizes from all segments, but the one thing they all have in common is strong credit history.

“80% of financing deals agreed are for a tenure of under six months as we focus on transaction-based financing, which is less risky,” says Wong.

The shorter turnaround time allows investors to get returns quicker while also balancing the amount of risk in the disbursement of funds. This is reflected in the breakdown of SMEs, where businesses specialising in wholesale and retail trading make up the majority of funding seekers on the platform, which also highlights the make-up of the overall Malaysian economy.

The Keys to Success

While every investment carries some form of risk, Funding Societies aims to help mitigate the risk posed to investors as much as possible. Its market-leading auto-investment algorithm was introduced as far back as 2017,
sharing similarities with robo-advisors in that users can easily spread their investments across multiple SMEs that fit their risk profile.

“Over 70% of investors have autobot set up for their account. It helps to queue on your behalf to execute investment opportunities based on parameters you set,” says Wong.

This comes in handy for investors that are busy with day-to-day activities and have no time to monitor all aspects of cash deployment, making it much more than just another fancy feature.

However, he is keen to stress that the platform also wants to ensure that investor awareness is at the highest level possible, with a detailed fact sheet provided for all SMEs seeking funding that includes a history of financial statements, write-up on the company, and risk assessment of the investment opportunity presented to investors.

“The fact sheet is available to all investors before the start of any crowdfunding. This is to ensure investors have sufficient time to study each investment opportunity and make an informed decision,” he added.

Alternative investments have long been championed as financial products of the future, but the Covid-19 pandemic is bringing them into sharp focus ahead of schedule. In the case of Funding Societies, the rate of user adoption was not stunted during this time and continued to grow, albeit at a slower pace.

“This shows how investors are now skewing towards online or digital investment platforms, such as P2P financing,” says Wong.

An impressive track record only serves to back up his claims, and being registered with the Securities Commission Malaysia also gives the platform credence among its users which include retail, high net worth, and institutional investors. It also helps that the majority of its users are on the younger side, with 80% under the age of 40. With all the progress made so far, it is not far-fetched to say that Funding Societies has arrived and is very much here to stay!

By Caleb Khew

Previous Post

A Guide on Applying for A Housing Loan in Malaysia

Next Post

Naluri: Mental Health and Wellbeing

Next Post
Image from proactivpeople.com.au

Naluri: Mental Health and Wellbeing

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

ESG Evolve 2023 ESG Evolve 2023 ESG Evolve 2023
  • Trending
  • Comments
  • Latest
From left Eizzar Supiar, AVP - Evaluation, Cradle_ Adlin Yusman, Co-Founder of BeMalas_ Suthenesh Sugumaran, Co-Founder of BeMalas_ and Joyce Wee, Former Executive Director of Etalage

Cradle and Bursa Malaysia Collaborate to Facilitate Listing of Local Startups in Bursa Malaysia

11/09/2023

Robo Advisor In Malaysia, 8 Robo Advisor Platforms To Choose From

17/08/2022
drawbacks unit trusts investment

5 Drawbacks Of Unit Trusts Investment That You Should Know Before Investing

19/09/2023
A calculator on financial chart, financial concept

Tax For The 6 Common Investments In Malaysia

19/09/2023

Digital Fundraising Platforms in Malaysia

Retirement Plans for the Self-Employed

SC Guidelines On Digital Assets

Retirement planning advise from the experts

Retirement Planning: Best Practices and Advice From Experts

Datuk Ir. Dr. Dennis Ganendra Achieves Coveted RAE International Fellowship for Exceptional Engineering Contributions

21/09/2023

Worldwide Holdings Berhad Leading the Green Revolution

21/09/2023

Malaysia’s dance with FAANG Giants

21/09/2023

ESG Evolution: COP27 to Carbon Stocks Insights

20/09/2023

Datuk Ir. Dr. Dennis Ganendra Achieves Coveted RAE International Fellowship for Exceptional Engineering Contributions

2 days ago

Worldwide Holdings Berhad Leading the Green Revolution

2 days ago

Malaysia’s dance with FAANG Giants

2 days ago

ESG Evolution: COP27 to Carbon Stocks Insights

2 days ago
Smart Investor Malaysia

© 2023 Smart Investor Malaysia | The contents on this website are for educational purposes only. You should always seek your own professional advice from the appropriate financial advisor or institution.

Category

  • About
  • Subscribe
  • Write For Us
  • Payment Policy
  • Shipping Policy
  • Cancellation and Refund Policy
  • Privacy Policy
  • Contact Us

Sign up to read our newsletter

  • Start Here
  • Investments
  • Personal Finance
  • Enterprise
  • Property
  • ESG
  • Lifestyle
  • News & Events
  • Bahasa Melayu

© 2023 Smart Investor Malaysia | The contents on this website are for educational purposes only. You should always seek your own professional advice from the appropriate financial advisor or institution.

No Result
View All Result
  • Start Here
    • Guides
    • How-Tos
    • Analysis
  • Investments
    • Asset Management
    • Stocks
    • Islamic Finance
    • Alternatives Investments
  • Personal Finance
    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance
  • Enterprise
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    • Fintech
  • Property
    • First Time Home Buyers
    • Central
    • Northern
    • Southern
    • Sabah & Sarawak
    • Regional / Global
    • Feature
  • ESG
  • Lifestyle
  • News & Events
  • Bahasa Melayu

© 2023 Smart Investor Malaysia | The contents on this website are for educational purposes only. You should always seek your own professional advice from the appropriate financial advisor or institution.