I have been reading through the thread and would like to comment on some of the concerns raised. Long one but worth a read if you are keen to know more :
- P2P lending is quite a popular concept globally. Check out Lending Club (US), Funding Circle (UK), We Lend (China), Society One (Australia) etc. Its relatively new in Singapore though, but there are enough examples in matured markets to confirm proof of concept.
- Just like any investment instrument it comes with its own set of risks attached. The onus is on the investor to do checks on the P2P company, understand their due diligence processes and go through the factsheet informing the investors about the details of the borrowers.
- Its currently not regulated by MAS but they are soon going to come up with regulations around it. They have recently set up a Fintech and Innovation Group to monitor P2P as well as other alternative financing products.
- There are many growing SMEs who do not get funding from banks because of the following reasons (could be one or all) :
a) The loan amount required is too small for banks to be interested in (traditionally banks are reluctant to fund amounts lesser than $100K since the cost of managing these accounts is same as larger accounts where they earn more)
b) Loans are usually brought in by the Relationship Managers who don't earn enough incentives on the smaller loans to take the effort
c) Banks usually take between 2-3 weeks to decision which is a long time for a borrower to wait, just to know whether his loan is approved or not.
d) The bank's requirement for documentation is very high which for SMEs is difficult to produce at times
e) Some SMEs do not meet the internal policy parameters of the banks even though they are credit worthy
Thanks for reading the long post.
edited by mod: Unsolicited Content (Commercial solicitation / Ads / Referrals / Spam)
