My Defaulted Note on Funding Societies Malaysia

In July 2019, I encountered my first defaulted note on Funding Societies Malaysia after two years with the platform. Today, I am glad to say that I have recouped my principal and thus, suffer no loss from this delinquent note.

What happened?

Funding Societies Malaysia managed to get the note issuer to settle the outstanding principal after a 4-month delay. However, the platform is still waiting for the issuer to pay back the outstanding interest.

Up till this point, I have received 14 repayment notes from Funding Societies Malaysia regarding this note.

Management of defaults

I have received an email from Funding Societies regarding its management of defaulted notes. This email provides more details than my previous article, so I am going to share it here.

There are three ways the platform takes to deal with defaults.

1. Restructure the note

This means lengthening the tenure, thus reducing monthly repayments. This might entail increased interest rate.

2. Engage debt collection agency (DCA)

If the issuer is uncontactable or repeatedly break their promise-to-pay, the debt collection may be outsourced to a DCA. The fee of DCA ranges from 18 – 25% of the successfully collected amount.

3. Take legal action

This is the last resort due to the higher fees and unpredictability. The time needed to settle the whole process ranges from 6 – 24 months.


Defaults are inevitable in peer-to-peer lending but I feel how a platform handles its communication and the recovery process is very important. I am very satisfied with the way Funding Societies Malaysia handles the defaulted note. It constantly updates the investors regarding the process. I am quite happy that this default is reversed and I might even have a chance to receive the interest too.

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.


  1. Talktpng

    Invest around 2yr in Funding Society Malaysia, total interest nett earn RM19000 but defeated until today is Rm 19400,so how,
    The way they hander defaulted is very lousy, when default, (1)restuctute than (2)take legal action(which cost less, mention in their estimate cost mail,around 5%),but instead they as lender to vote to take legal action or not, than later there announce less than 35% voted,so they ask Debt collecter that will cost 18-25%,so do u think Debt collected can torch the company acc/asset/P gurrentor,I think the way they hander default is Bias n waste of time,pls advice

  2. Talktpng

    FSM should not ask lender to voted to take legal action or not ,becoz u know why,a lot of small amount invested won’t take any action to voted,n for big amount lender got stuck by less than 35% voted to take legal step,n they wasting time by engage with Debt Collected.

    1. Post

      Hi, Talktpng.

      Thanks for sharing your experience.

      I am not too sure of the legal action process but recently one of my notes has gone through this route without any notification of voting. I am not too sure about the fee involved in the legal process but I believe that legal action might cause lower recovery amount as the financing from Funding Societies might not be the priority if the borrower goes bankrupt. There might be loans from other sources that need to be repaid first before Funding Societies investors. Hence, the platform tries to enlist the service of debt collector first. Furthermore, the debt collector will only be paid if he successfully recovers the loan.

      I think loan restructuring is the best course of action for both investors and borrowers. But sometimes, it won’t work too due to the business environment or the nature of the SMEs.

      That’s my two cents. I think you have more experience in dealing with defaults than I am, so your point of view might be truer to reality than mine.

      So, would you still continue to invest in Funding Societies? Hope to hear from you soon.

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