The thing that I dread finally happened. I have one defaulted note on Funding Societies Malaysia after two years on this platform.
Amount involved
As it is a partially paid note, I do not suffer a very big loss. In fact, I consider it to be insignificant. Overall, I will incur a 10% loss of my principal. It is about 0.5% of my outstanding principal. If based on the number of active notes, my default rate is 4.17%. The rate drops to 1.82% if the denominator is total invested notes.
Action taken
The defaulted note was scheduled to be repaid in two tranches. The final payment should be in April 2019. However, the borrower did not pay on time on both occasions. So, when a debt is not repaid, the platform communicates with the investors through repayment notes. I have received a total of 11 repayment notes for this delinquent borrower.
Currently, the platform is submitting the information of the defaulted note issuer and personal guarantors to credit agencies. This action will impact the note issuer’s credibility in future financing applications.
The platform always gives a date for next action but it might take a few extra days for update. It is reassuring when I feel that actions are taken, even though my chance of getting back the money is not clear yet.
Conclusion
Overall, I am satisfied with how Funding Societies is managing defaults. I think it is way better than Fundaztic. Although I still do not know what will happen to this note, it is better than being kept in the dark. Constant updates are really important for me. Based on my current default rates on both platforms, I will recommend Funding Societies Malaysia more than Fundaztic now.
Referral link
Below is the referral link to Funding Societies. By clicking on this link, I may gain referral rewards from your registration with the platform. If you think I have done a good service in explaining the topic, please click on the link below if you have interest to register. Otherwise, you can always search Funding Societies Malaysia with Google and register yourself.
Funding Societies Malaysia: Link here – If you register and invest through this link, both of us will get RM 30*.
*Terms and conditions apply.
