Fundaztic P2P Financing

Match-making Dreams with Investments – the Fundaztic Way

Peer-to-peer financing (P2P) is a form of crowdfunding designed to help raise funds for those who need to borrow, with those who have extra cash to invest, without involving middle parties such as banks.


Based on the idea that investors will get higher interests by lending their money to borrowers who will get their needed funds at interest rates based on the projected risks involved, an online platform is responsible for matching both parties to ensure that objectives are met.


There are three parties involved in the P2P financing process: the borrower, the investor, and the P2P operator. Here’s what you need to understand about their respective roles:

What is P2P Financing
Matching micro and new businesses in need of funds with potential investors looking to grow their wealth – without a bank

The borrower/issuer
The borrower needs to submit an application detailing essential information such as funds required, business information, and more, to be evaluated by the platform. If the approved terms and conditions are accepted by the borrower, the platform will host the funding.  If funding is successful, the borrower will then be required to make repayments to the investors via the P2P financing platform on a monthly basis along with interests. The borrower is also known as the issuer because they will be issuing investment notes to investors to invest in them.

The P2P operator
After the application from the issuer has been uploaded, the P2P operator then needs to conduct due diligence on the issuer’s eligibility such as assessing its credit history ratings and related data to perform a thorough credit evaluation. This is necessary to determine the issuer’s risk profile which subsequently impacts its interest rate. Upon approval, the operator will issue the terms and conditions of the agreement to the issuer to be agreed upon. Once the application is successfully hosted on the P2P platform, it is known as an investment note.

The investor
To become a qualified investor, one needs to sign up and be approved or verified by the P2P platform before investing. It is always prudent for all investors to scrutinise their investment notes by going through the profile of the issuer, paying special attention to the probability of default (PD%), funding purpose, tenure of business, and the tenure of funding – as expected of all savvy investors!


P2P financing in Malaysia - in a nutshell

In Malaysia, the Securities Commission (SC) is the regulatory body for P2P funding activities via its P2P regulatory framework that was introduced in 2016. Malaysia also happens to be the first nation within ASEAN to come up with a full regulatory framework and guidelines to run the P2P platform. The framework sets out all requirements for the registration and obligations of a P2P operator, as well as the types of issuers and investors who can participate in P2P activities.

Within Malaysia’s P2P financing landscape, only local businesses registered with the Companies Commission of Malaysia (SSM) are allowed to become issuers on P2P platforms, in contrast with the more matured markets such as the USA, the UK, and China which permits fundraising for both companies and individuals. P2P investment opportunities however, are open to all investors although it is recommended not to extend beyond RM50,000 for retail investors.

There are currently only six appointed operators to run P2P lending in the country but Fundaztic is the new kid on the P2P financing block you need to know.


Have you met Fundaztic?

Fundaztic P2P Financing logo


Managed by Peoplender Sdn Bhd, Fundaztic is one of only six Recognised Market Operators licensed by the SC to engage in peer-to-peer lending in the country. Its founders comprise of an accomplished group of seasoned banking executives and a lawyer with more than 50 years of experience combined in areas related to finance, technology, and law.  

Fundaztic founders
Image source: www.fundaztic.com

The P2P framework may have been set up in 2016, but back in 2014, Fundaztic had already broken ground by beginning engagements with the regulator to gain insights on the framework that is to be.  It also inked an agreement with Shenzhen Sunline Tech Co Ltd, a public-listed company in China specialising on fintech to take in key learning lessons and actual experience to jointly develop its platform. As one of the most vibrant P2P financing markets in the world, China yields valuable knowledge which Fundaztic implemented when launching in the Malaysian market.

And the insights paved the way to a flying start for Fundaztic. Having gone ‘live’ on 7 July 2017, the first issuer achieved its funding target of RM20,000 from a total of 37 investors inside just four hours!

Fundaztic December statistics
Breaking down Fundaztic’s roaring numbers as of 13 December 2017


Key characteristics of Fundaztic

For issuers, these are the unique characteristics that sets Fundaztic apart from the rest:

Fundaztic borrowers' perks


Fundaztic offers its investors a host of affordable and amazing features that is hard to beat:

Fundaztic investors' perks


If you’re looking for an investment opportunity with Fundaztic, think of this as an online shopping experience:

Fundaztic online shopping experience


Solving an RM80 billion problem. Are you on board?

The Malaysian small and medium enterprise (SME) sector is rumoured to have a financing gap of approximately RM80 billion. What this means is that a large swathe of local micro businesses and SME entities are in search of said amount in loans and borrowings to fuel their enterprises and growth capital which they are unable to source from traditional financial instruments. Some of the reasons include SMEs’ lack of a robust track record and the need for collaterals which they may not readily possess for approval.

This is where P2P financing - and Fundaztic - steps in to bridge the gap. The key objective is to assist small businesses to stimulate economic growth by introducing an alternative channel to source funds and what better way than to tap into the strength of the online investment community who are pursuing an alternative wealth creation model!

With a target to raise RM40 million by the end of 2018 and a more ambitious RM500 million aimed over the next five years, Fundaztic is looking at working closely with local banks to address the issue of short-term financing needs of SMEs.

Even though they are operating in a different space - and rules - from banks, Fundaztic seeks to work with banks and fund managers to leverage on their extensive network to further drive access to financing for SMEs that are credit-worthy but cannot be on-boarded by the banks due to the cost of acquisition, internal policies and product features as well as risk appetite.   


Breaking down the numbers, how are you diversifying your investments?

Putting your hard-earned money into the financial market be it in the form of bonds, fixed deposits, or investment trusts to make an ROI should not be a convoluted process.

Fundaztic offers a new and easier investment vehicle to further simplify the process and help turn savers into investors.

Let’s compare an investment capital of RM20,000 over a 24-month period by selecting fixed deposit, unit trust, and bonds against Fundaztic’s P2P financing side-by-side.

 

Fixed Deposit
(
CIMB Unfixed Deposit)

 

Unit Trust
(Kenanga Growth Fund)

 

Bond
(
AAA Government Bond)

 

P2P Financing
(
Fundaztic note ID 38, Risk Grade D8)

 


Rate of return (p.a.)
 


3.40%


11.81%


4.17%


12.69%


Return (p.a.)
 


RM680


RM2,362


RM834


RM2,538


Total sum of return
 


RM21,360


RM24,724


RM21,668


RM25,076

Accurate as of 6 December 2017

The results above displays the gross rate of return without including fees or standard deductions. Even though each investment vehicle comes with its own risks and rewards, P2P financing via Fundaztic remains an attractive proposition.

With Fundaztic, investors will be receiving their principal plus interest repayments on a monthly basis, thereby boosting their monthly cashflow unlike unit trust investments which they can only get back upon redemption or even FD of which interest is paid at the end of the committed period


6 reasons to begin your P2P financing journey with Fundaztic

These six reasons will convince you why Fundaztic will satisfy your investor appetite:

6 reasons why you need to use Fundaztic

Are you ready to diversify your investments and hop on the P2P financing train? Begin your journey today by signing up with Fundaztic, where smart investors and entrepreneurs connect.



This article was sponsored by Fundaztic logo