How Your Investment in Peer-to-Peer Lending Supports Local Businesses

Small and medium enterprises (SMEs) are at the heart of Singapore’s economy. They make up 99% of our enterprises, employ two-thirds of our workforce, and account for about half of Singapore’s GDP. To date, there are nearly 200,000 SMEs in Singapore.

While we often see success stories on news and social media, the road to success is sometimes not as straightforward. Find out how you can invest in peer-to-peer (P2P) lending with Funding Societies and support emerging Singapore SMEs.

Your contribution can directly make an impact on the business you’re supporting

According to a 2017 Straits Times poll, 40% of SMEs said that they thought the Singapore economy would grow in the next 12 months and 43% felt positive sales growth was on the cards.

By investing in SMEs through P2P lending, you directly contribute to immediate cashflow needs of the SMEs to grow their businesses. In return, you’re rewarded in monetary returns from the interests of the business loans. Funding Societies is one such platform in Singapore that is supporting local businesses through crowdfunding.

Read about how peer-to-peer lending works.

You earn potentially high returns on your investments while supporting local businesses

P2P lending harnesses the power of people to help local, homegrown businesses to grow and expand. Investing in P2P lending allows you to potentially earn up to 14% per annum returns on your investment.

It is actually really easy to invest in SMEs in Singapore through P2P lending. Funding Societies is a digital P2P lending platform that is dedicated to serving SMEs, therefore the mission of Funding Societies is aptly, “Stronger SMEs, Stronger Societies.” Investors receive monthly repayments which they can re-invest to support even more local businesses.

Support SMEs across multiple industries

The Ministry of Trade and Industry announced a $4.5 Billion industry transformation programme to systematically raise productivity, develop skills, drive innovation, and promote internationalisation, so as to catalyse transformation and achieve the stated vision of each industry. There’s also Infocomm Media Development Authority’s Go Digital Programme — an initiative that allows SMEs to increase productivity and capture more online sales through digitalization of their businesses.

However, the Singapore Budget 2017 recognizes that the government alone cannot help all businesses transform and the need to strengthen partnerships and collaborations in order to help SMEs succeed. Financial institutions, including alternative finance companies such as Funding Societies, play an important role in providing financial support to help SMEs grow and prosper.

As the minimum investment for peer-to-peer lending starts as low as $100 on the Funding Societies platform, you could help the economy holistically by investing in multiple industries and companies at the same time, in turn diversifying your investment portfolio across sectors.

Since its inception in 2015, Funding Societies has already expanded to two more Southeast Asian countries over the last two years – Indonesia and Malaysia. It is the only P2P lending platform to have won the Monetary Authority of Singapore (MAS) Fintech Award in 2016 and was recognised as one of the Top 250 Fintech companies globally.

More than 23,000 investors are already on Funding Societies’ platform regionally. Find out how to invest on the platform here.

Interested? Sign up for your investor account with Funding Societies now.

Disclaimer

This article is contributed by Funding Societies.

It should not be construed that Moneydigest is endorsing this article or any of the products and services provided by Funding Societies.

Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.

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How to start your peer-to-peer lending investment journey with Funding Societies

In September, we gave you 5 reasons to invest in peer-to-peer (P2P) lending. If you have not already opened your account on Funding Societies’ investor platform, it’s time to start now and earn up to 14% per annum returns on your investments along with 21,000 other investors who invest in crowdfunding with Funding Societies.

Here’s a recap of how P2P lending works

What are the products?

With Funding Societies, you can invest into the following 2 products:

Business Term Loans – Loan given to SMEs for working capital, fulfilment of contracts, acquiring new contracts etc. with tenors ranging from 1 month to 12 months. As an investor, you receive principal and interest on a monthly basis thus unlocking the cash and allowing you to reinvest the monies into new loans.

Invoice Financing (Accounts Receivables Purchase) – Funding provided to SMEs against the invoices issued to their buyers/debtors/clients with tenors ranging from 30 days to 90 days depending on the invoice credit period terms. Investors receive repayment at the end of 30/60/90 days along with interest.

Every deal could have a few hundred investors investing alongside you and thus you fund a small part of each loan/invoice and therefore also bear the same small part of the risk.

Okay, how do I start?

  1. Sign up as an investor on Funding Societies platform
  2. Receive your subscription agreement and e-sign it! (Fun fact: Funding Societies is the first P2P lending platform that has e-signing of contract so that their investors can do it on their computer or mobile anytime, anywhere)
  3. Make your first deposit of minimum $1,000
  4. Browse for opportunities on web or app platform
  5. Start investing from as little as $100
  6. Turn on Auto-Invest to let the system allocate investments based on your pre-set criteria

How do I choose which investments to go for?

Before every crowdfunding opportunity, you’ll receive an email alert for the deal. There is a detailed fact sheet that you can review hours before deciding to put your money in the loan.

Some of the investors on Funding Societies platform have placed their monies on every loan by either (i) manually investing when the crowdfunding period starts, or (ii) auto-investing (see point #6 above). For every auto-invested loan, you always have a choice to opt out from the investment before the crowdfunding starts.

However, different investors have different risk appetite, so it is common practice, and also a good one, to explore the platform and view the various opportunities before making your investment decision.

How do I track the repayments and performance of the investments?

When you invest on Funding Societies platform, the repayments are on a monthly basis.

Simply log on to the web portal and access the dashboard. Check out the screenshots here.

As an investor, you will also receive late repayment fees from SMEs who did not make the repayment on time – but hey, when you share the risk, it’s only fair that you share the returns right?

Common strategies to invest in P2P lending

While there is no one-size-fits-all formula for any type of investment, Funding Societies shares three ways you can explore for your investment portfolio with them:

  1. Diversify, Diversify, Diversify

As a matter of fact, investing in P2P lending is already one way to diversify your investment portfolio. However, within P2P lending, it makes sense to diversify your portfolio into different loans – by industries, amounts, tenure – to minimize the default risk.

  1. Create compounding effect by re-investing

Funding Societies’ repayment schedule is on a monthly basis, that means you get your original invested amount + pro-rated interests back every month based on the stated dates. While you can hold the money in the account, a smart thing to do is to use this for other investments on the platform to create a compounding effect.

  1. Free your time with Auto-Invest

As mentioned, Auto-Invest is a feature Funding Societies created to allow their investors to put in their money for loans based on their preferred criteria. Here, you can choose a range of interest rates, tenure, industries. Once it’s set up and switched on, the algorithm sets in to auto-allocate your preferred amount for the loans that fall within your criteria.

Start exploring P2P lending as an alternative investment now with Funding Societies. Sign up now by clicking here.

 

Disclaimers

This article is contributed by Funding Societies.

It should not be construed that Moneydigest is endorsing this article or any of the products and services provided by Funding Societies.

Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.

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5 Reasons to Invest in P2P Lending Now

P2P lending, popularly known as crowdfunding, provides individuals and institutions an opportunity to earn passive income through investing in business loans to growing and deserving SMEs. Returns on investment are in the form of repayment of periodic interest along with the principal, based on the amount that investors have put in. In a single loan, there could be hundreds of investors who co-invest and share the risks and returns of investment.

This concept first appeared in 2005 with Zopa  (founded in the UK), and has become a proven investment product globally. In 2016, more than US$330 Billion has been invested in P2P lending with China, US and UK as market leaders.

Can you guess where’s the next region of growth for P2P lending? That’s right – Southeast Asia. Funding Societies (based in Singapore, Indonesia and Malaysia) is one of the leading platforms in this region with licenses/approval by regulators in all 3 markets.

Here, we give you 5 compelling reasons to put your money into P2P lending :

1. Returns are higher than most traditional investment products

One of the key factors in any investment is what you get in return.

In Singapore, investing in P2P lending can potentially earn you up to 14% per annum returns on your investment. This is much higher than 1%-2% per annum on Fixed Deposits or 2.5% per annum on your CPF account.

2. And you don’t need to wait for years to see your returns

The typical tenure for these business loans range between 1-12 months, so unlike fixed deposits or insurances, you don’t need to lock your money in for years to see the returns. In addition, you get the interest as well as principal back on a monthly basis, allowing you to unlock the cash and provide opportunities to reinvest the money and creating a compounding effect.

3. You can invest even if you’re a fresh grad or NS man

Funding Societies is the only platform that allows investments starting from as low as $100 (minimal investment on other platforms is usually $1,000 per loan), which means literally anyone can invest. It allows one to test the platform before increasing the amounts and also provides opportunities to diversify into multiple loans even with a small starting capital.

4. It’s a simple product that doesn’t require any technical knowledge

Some investment products require a high level of technical knowledge plus a close watch on the market movements.

P2P lending is simple and straightforward. It’s easy to understand the factsheet (prepared by the platform) which covers the SME’s business model, track record, financials and purpose of loan. Investors can make decisions based on the factsheet. If you are too busy to review every factsheet, Funding Societies has an auto investment feature which lets you select your investment criteria and make the investments automatically.

5. Southeast Asia’s leading P2P platform is in Singapore

Most Singaporeans prefer to invest with companies with (i) a solid track record, (ii) operations in Singapore.

Since starting its operations in Singapore, Funding Societies has already expanded to two more Southeast Asian countries over the last two years – Indonesia and Malaysia. It is the only P2P lending platform to have won Monetary Authority of Singapore (MAS) Fintech Award in 2016 and was recognised as one of the Top 250 Fintech companies globally. It is backed by world class venture capitalist Sequoia Capital who have invested into companies like Google, Apple, Airbnb and Carousell amongst many others.

More than 19,000 investors are already on Funding Societies’ platform regionally, and the reasons:

  • LICENSED AND REGULATED: Funding Societies is licensed in Singapore by MAS and is a regulated entity. It uses escrow account for investor funds managed by a licensed trustee ensuring safety of investor monies.
  • HIGH QUALITY INVESTMENTS: Because of the rigorous risk assessment that Funding Societies does on the companies before offering the business loans for crowdfunding, the investments are good quality and at the lowest default rates in town.
  • EASY TO INVEST: Investors can make their investments and review their portfolio on the go with Funding Societies investor mobile app. With Auto-Invest, investors just need to define their preferred parameters and let the system do the work.
  • SKIN IN THE GAME: The top management at Funding Societies believes in ALL the business loans that they give, they invest in every single loan. As CEO Kelvin Teo says, “We co-share the risks and rewards of investments with you.”

Sign up for your investor account with Funding Societies now.

Disclaimers

This article is contributed by Funding Societies.

It should not be construed that Moneydigest is endorsing this article or any of the products and services provided by Funding Societies.

Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.

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Understanding the Forex Market

The trading of currencies on the open market serves many practical purposes. It enables individuals to purchase local coinage when visiting a different country or region. It allows governments to regulate the supply of money within their own economies. It also provides an opportunity for traders to realise a profit, simply by speculating on the price movements of different currency pairs. Each of these contributes to the vast size and scale of trading activity that occurs within the foreign exchange market every single day.

How big is the forex market?

The FOReign EXchange (forex) market is is the single largest financial market on the planet, when measured in daily trading volumes. Each day, around $5.3 trillion worth of currency is bought and sold on the open market. That equates to more than $220 billion of trading activity every hour.

The volume of forex trading far exceeds that of the bond market or the stock exchange – and even the economies of entire nations.

The New York stock exchange, for example, would have to trade for 30 days to match the single-day trading volume of the currency market. The combined annual GDP of Russia, Italy, and India is approximately equal to one day’s forex trading.

A brief history of forex trading

The trading of one currency for another is an ancient phenomenon, but the modern forex market truly emerged in 1971, with the completion of the Smithsonian Agreement.

The agreement allowed the central banks of ten major economies to buy, sell and issue currency in a way that would allow their money to fluctuate in value by 2.25 per cent against the US dollar. The Smithsonian Agreement is widely accepted as the first step towards the free floating exchange rates that we recognise today.

The proliferation of web-based technologies in the 1990s proved another significant milestone in shaping today’s forex markets. Access to the internet gave private individuals the means to not only access markets, but also the educational resources that would help them to understand forex, and how to start trading. Since the end of the 1990s, the number of forex trades that are executed through an online platform has grown exponentially: accounting for as much as 23 per cent of all forex activity by 2016.

Digital trading platforms have also eased the transition to an era of automated trading: where algorithms are used to calculate and execute trades far quicker than any human could hope to achieve. The forex market grew 20 per cent between 2007 and 2010 – and much of this expansion has been attributed to the development of high frequency, algorithmic trading machines.

Who are the big players?

This rapid expansion of the forex market has caused some of the established currencies and institutions to lose a degree of significance in recent history. Yet the biggest players in the foreign currency trade remain some of the more familiar names in the world of finance – for the time being, at least.

The most commonly traded currencies by share of total transactions are the US dollar (which accounts for more than 87 per cent of all trades), the Euro (31 per cent), and the Japanese Yen (almost 22 per cent). Of these, EUR/USD is the most commonly traded currency pair, accounting for 23 per cent of all trades in 2016.

International banks dominate forex trading: the largest six banks account for half of all transactions; the top ten banks are responsible for more than 65 per cent of trades. Citigroup (13 per cent), JP Morgan, (9 per cent), UBS (9 per cent), and Deutsche Bank (8 per cent) are the four most active financial institutions in the forex market.

Where is forex traded?

Asset 1 - Forex Market

Forex is a truly global marketplace. Four major trading centres – in London, New York, Tokyo and Sydney – provide access to the currency markets 24 hours a day. Of these, London sees the highest trading volume, accounting for 37 per cent of all currency trades.

However, while the City of London is responsible for a high percentage of daily total trades, it does not regulate or control the market in any way. In fact, the trade in foreign currency is not facilitated by any single authority or centralised exchange at all. Instead, traders can buy or sell currency pairs directly with other traders in the market. This form of direct exchange is known as an over-the-counter (OTC) market. OTC trading is considered one of the primary factors in the growth of forex: independent investors can access and participate in the market from any location, at any time of the day or night.

The foreign currency market has undergone dramatic change, and experienced rapid growth, throughout the past five decades. It has adapted its role to make use of new technologies: permitting free-floating currency valuations, and enabling private individuals to participate in markets without having to leave their homes.

Today, the forex market continues to evolve, and represents one of the most open and democratic trading opportunities on the planet. But the buying and selling of world currencies represents more than an investment: it is helping to make efficient world trade a reality.

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Rising popularity of short time frame trading in forex

Traders who are scalping the market do not only trade the market to make a quick profit. There are also people in the market who scalps the market to check out this strategy. This strategy is highly rewarding to successful traders in the market who can understand the market trend. If you are a new trader and want to make a lot of money, you can start scalping. It is not a good choice for the new people in forex to scalp as their main strategy. There are many long-term strategies in the market and you should follow these strategies to make a profit in your beginner account. Also, you need to have a lot of money in your account to scalp the market. The professional scalpers at Singapore always trade with a huge trading capital since they know in order to reduce the risk exposure in short time frame trading they will need a decent balance. But a big trading account is not going to ensure your profit factors in this industry. As short time frame trader, you must have a very clear knowledge in this industry.

Why traders scalp in forex?

Most of the traders prefer scalping in the forex trading industry since it allows them to book their profit in the market very quickly. Unlike the long term traders, they don’t wait for days and weeks to lock their profit in the market. They simply execute high lot size trade in the market and within hours they close the trades either with profit or loss. But in order to become a profitable short time frame trader, you must have a very clear understanding of the basic of the forex market or else it will be extremely difficult for you to survive in the long run.

They are greedy: Not all, but most of the traders who scalp the market are greedy. It is not that every trader who uses this strategy are greedy, but most of them are. Many interested people who haven’t opened a Forex account have heard of scalping and how easy it is to make money in Forex. To them, scalping is the only way to become rich in Forex. Out of greed, many traders scalp in forex. However there some expert traders trading CFDs with an extreme level of precision in the short time frame. If you want to become such an expert then you need to learn the fundamental and technical analysis very precisely. A single mistake is enough to wipe your entire trading account in the market.

Think of this strategy as a quick rich scheme: Many traders also want to get rich quickly. They have been looking for a perfect strategy where they can make money quickly in their accounts and do not have to trade all day. Scalping is their answer. They think of this strategy as some quick rich scheme in the market of Forex.

Know the markets: traders who scalp are very experienced. They can understand the market in any second. They trade the market in a very short timeframe and they do not need hours to figure out the market. With experience and knowledge, they can tell where the market will go. They trade the market for this reason to use their experience to make quick money.

Love fast results: if you love fast results, you will love scalping. Traders want to make money quickly in the market. Scalping gives them this opportunity. Though there are risks, the professional traders trade with this strategy. The fast result of scalping is one of the reasons it has become popular among the traders though it has many bad sides in trading.

Summary: Trading is nothing but running a sophisticated business. As a professional trader, you will always have some losing trades but you need to learn to take managed risk in the market. Always try to execute your orders by using rational logic. Last but not the least try to trade in favor of the long-term prevailing trend.

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