Your 2018 Investment Resolution – Earn up to 14% p.a. in Returns

It’s the start of 2018 and you are perhaps setting up your investment goals for this year. Why not consider adding peer-to-peer lending into the mix? Also commonly known as debt crowdfunding, P2P lending has been around since 2007 in UK, and catching on in the region. Founded in Singapore, Funding Societies is currently the leading platform in Southeast Asia.

Here’re 5 reasons you should review peer-to-peer lending as part of your investment strategy:

  1. It’s not difficult to understand

Imagine a company needs to take a business loan for expansion, new projects  or seasonal stocking up. Platforms like Funding Societies act as a marketplace to crowdfund such loans, which may potentially yield attractive returns for investors like you.  The company pays its loan principal + interest repayment on a monthly basis and investors receive their initial capital (principal) plus returns on investment (interest).

Another product is invoice financing – Company A has sold its products or services (as a supplier) to Company B (buyer), and is waiting for Company B to pay. The waiting time depends on the invoice payment terms – usually 30, 45, 60 or 90 days. Company A can have an early access to the money by pledging the invoice on a P2P lending platform. Investors receive payments (including invested capital plus interest) on the due date when the invoice is paid.

  1. Investment starts from just $100

As loans are crowdfunded, a $200,000 can be filled by multiple investors starting from as low as $100. As a new investor, this is a good way for you to try peer-to-peer lending as a form of investment.

To many investors on Funding Societies’ platform, they take advantage of this minimal amount to diversify their investments extensively within the platform.

  1. See results in the short term

Business term loans on Funding Societies’ platform typically run for as short as 3 months and up to 12 months. Given that you receive monthly repayments as an investor, this product has a lock-in period as short as the loan tenure.

  1. Potential high returns & rigorous credit assessment

With returns as high as 14% per annum, P2P lending is a serious contender in one’s investment portfolio. Each loan coming to Funding Societies goes through rigorous in-house credit assessment before approving it to be crowdfunded on its platform.

  1. You have full control and still get support from the platform

As an investor, you have full autonomy to choose which loans to invest, depending on your risk appetite.

That said, there is still a Customer Experience team behind Funding Societies’ investor platform that you can reach out to. Miyu, the chatbot, is available 24X7 and steps in to help with round-the-clock queries. Many investors are also shaping some features through active feedback – talk about getting personal!

Start your investment journey with Funding Societies here.

Still have questions?

Funding Societies is organizing an investors’ event on 24 January 2018 from 6.30pm at The Working Capitol (1 Keong Saik Road). Attend the event as the team shares more about P2P lending and the investor platform!

Details and registration at: event.fundingsocieties.com/investor-24jan2018

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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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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Why You Should Invest into P2P Lending in 2017

Is expanding your investment portfolio one of your 2017 New Year’s resolutions? Unsure about which opportunity is best? Then P2P lending might be the right investment for you! Hailed by asset managers and investment experts as a new asset class with attractive returns, P2P lending is slowing catching on and moving mainstream. In 2015, P2P lenders originated loans worth $64 billion through a mix of retail and institutional investors. Market researchers expect the industry to grow at a cumulative annual growth rate (CAGR) of 53.06%. For an investor, there are many reasons to invest in this asset class, besides the segment’s potential.

  1. Short Learning Curve and Requires Little Expertise

Compared to other forms of investments such as stocks or bonds, P2P Lending has a very short learning curve. It is considerably simpler to grasp – the platform would have already done most of the assessment for you. Funding Societies is one such P2P business lending platform. Winner of the MAS Fintech 2016 award, they have a presence across Singapore, Indonesia, and Malaysia. Not only do they perform detailed due diligence and credit assessments on all prospective borrowing companies, they also undertake collections if there are delays in payment by the borrowers. Only deserving companies are approved for loans. A factsheet detailing important information about each borrower and its directors is prepared for the investors and put up to facilitate an informed investing decision.

  1. Low Investment Commitment

You don’t need to set aside large amounts to invest into P2P loans. Usually, the minimum investment is about $1000. At Funding Societies, it’s even lower – just S$100 per loan. This provides investors an opportunity to test out the concept and the platform before committing a larger quantum. Investors also have the flexibility to invest in shorter time horizons, with tenors ranging from 1 to 12 months. Compared to investments which require a longer lock-in period, P2P lending provides a shorter and more liquid investment option.

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  1. Opportunities to Diversify

You may perhaps already have investments in properties, stocks, bonds etc. P2P lending provides yet another avenue to diversify. Not only is P2P lending an alternate asset class, it also provides opportunities to invest into loans in different industries, which minimises risk exposure to any particular industry. The low minimum investment ensures that every investor irrespective of their income can ensure diversification by investing into multiple loans.

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  1. Attractive Returns

With returns more attractive compared to traditional investments, the appeal of P2P lending is obvious. At Funding Societies, investment returns could be as high as 14% per annum. Additionally, compared to most investment products, the risk is lower given the opportunities for diversification, shorter tenors, and easy-to-grasp concept.

  1. Periodic Returns

Unlike most investment products, P2P investments are fairly liquid with returns (principal & interest) paid back on a periodic basis (usually every month). Funding Societies credits its investor accounts with repayments on a monthly basis with the option for investors to either withdraw or even re-invest, creating a compounding effect.

The World Bank has projected a 2.7% global growth rate for 2017, along with a lower growth rate of 1.8% for developed economies and predicted heightened uncertainty. Add to the fact that stock markets have been volatile and most categories of investments are offering relatively low returns, now is the right time to invest into a shorter-term and more liquid asset class with reasonable returns that ensures wealth creation even in gloomy times. Is P2P lending the right asset class for current times given the short investment horizon, relatively liquid option, low investment requirement, and attractive returns? Seems right.

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Funding Societies is a Singapore-based P2P lending platform with a regional presence. It’s founded by Harvard and Stanford graduates, with collective management experience from banks, FIs, tech firms and startups. It’s funded by prominent Silicon Valley venture capital firm Sequoia Capital, who are early investors of Apple, Google and AirBnB amongst many others  It is one of the first to receive licenses and recognition across countries in Singapore, Indonesia, and Malaysia. To start investing in P2P lending, just visit www.fundingsocieties.com.

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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The Most Overlooked Principle of Investment in a Weak Economy

A fierce economy

In my years as a consultant, I have advised and been mentored by many brilliant individuals including the CEO of major corporations and household names. Risk / return ratio was always the centrepiece of major decisions. While regulators and financial institutions are taking up more responsibility in the post-crisis world with Dodd-Frank and Basel III, we as individual investors should view investment return with a risk lens too, for risk is the shadow of return, the two sides of the same coin.

Many are attracted by the idea of “guaranteed investment return” or “maximum return minimum investment.” A Google search of these keywords gives us 3.2 million and 216 million results respectively. However, these pursuits are inspirational but not aspirational. In financial markets and many commercial activities, if one wants to achieve higher returns on average, one often has to assume more risk. The key question is then not “How can I make the most return?” but rather “How can I make the most return at a risk I’m comfortable with?”

Four Common Approaches in Risk Management

In the practice of risk management, there are 4 common approaches towards risk i.e., avoid, transfer, mitigate and keep. Most would inadvertently take the approach of avoid or keep i.e., avoid investment risk and not invest at all, or invest and face the full risk. In fact, based on an internal survey Funding Societies has conducted with 500 members of the public, 50% of the respondents across all segments keep their funds in saving accounts and do not invest. 19% of respondents consider returns but not safety of capital as critical investment criteria. Avoid and keep are common not because of ignorance, but because of convenience.

Importance of Diversification

Investing has to be deliberate. For most, we believe the right approach is to mitigate risk by systematically diversifying investment. While a focus strategy may be suitable for experts who dedicate hours into analyzing and monitoring investments, diversification is tremendously valuable for regular investors who prefer to “invest and forget”. Effective diversification is not only about making more investments, but also investing in areas less correlated with each other by geography, industry and asset class etc. This is especially true in a weak economic environment that is fraught with uncertainty.

I have personally invested in equity, investment fund, real estate and alternative investment, with of course always 6 months of savings as contingency. I began with Asia equity and bond investment funds to achieve diversification even with limited capital. As I accumulated more capital, I ventured into US equity and Singapore real estate for further diversification. Diversification has helped me through many financial crises. By strategically allocating funds into a portfolio suitable for me, I only have to check my investments once a month and still enjoy reasonable returns.

P2P Lending Platform – A New Way to Diversify Your Investments

The recent rise in alternative investments such as peer-to-peer (P2P) lending in US, UK, Australia and China provides a new, proven opportunity for higher return and diversification. While higher return clearly comes with higher risk, it is at a level suitable for working professionals like me, especially given the shorter term and hassle-free nature of P2P lending. Investing on P2P lending has become my new favorite. A few P2P lending platforms have since launched in Singapore. An example is Funding Societies that focuses on small-medium enterprise (SME) loans.

Of course, diversification takes capital, cost and effort. Undue diversification could spread us too thin across investments. The key is to select uncorrelated investments. The less correlated the investments are, the better the diversification effect. One may ask: how do we know whether the investments are correlated? Without going into a statistical model or correlation matrix, basic intuition is a good start.

As risk guru Michel Crouhy aptly summarized, “The future cannot be predicted. However, the financial risk that arises from uncertainty can be managed.” We need to be deliberate in our risk / return decisions and be diligent in diversification because if we don’t decide them for ourselves, the market will decide for us.

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