Peer-to-peer Financing

(Latest update: 5 October 2018)

Essentially, peer-to-peer (P2P) financing is making a loan. Its reward is the interest earned and its risk is default. There are 6 such platforms in Malaysia according to Securities Commission Malaysia website (Link).

Platforms	Logo	Remarks
AlixCo		–
B2B FinPAL		–
Fundaztic		–
Funding Societies Malaysia		–
Nusa Kapital		Shariah-compliant
QuicKash		–

Comparison of P2P financing platforms

Let’s compare the platforms.

Platform	AlixCo	B2B FinPAL	Fundaztic	Funding Socities Malaysia	Nusa Kapital	QuicKash
Registration – first time deposit (RM)	0	1000	0 - 50	1000	0	0
Minimum investment amount (RM)	500	100	50	100	500	100
Loan tenure (months)	6 – 24	1 – 9	3 – 60	1 – 24	2 – 6	¼ - 24
Platform fee	1% on total	30% on interest	1% on total	Variable (0.16 - 2% on total or 15% on interest)	10% on return	1.25 – 1.5% on total
Transaction fee (RM)	Nil	Nil	0 – 3 (1)	Nil	Nil	Nil
Repayment	Instalment	Bullet or instalment	Instalment	Bullet or instalment	Instalment	Instalment
Top up fee (RM)	Standard charge by bank	Standard charge by bank	1.06	Standard charge by bank	Standard charge by bank	Standard charge by bank
Withdrawal fee (RM)	N/A (2)	Nil	Standard charge by bank (3)	Nil	Standard charge by bank	1.06
Withdrawal processing time	N/A (2)	≤3 business days	≤2 business days	≤4 business days	No info (4)	≤2 business days

¹Up till now, I have never been charged transaction fee by Fundaztic.

²All repayments including interest will be automatically transferred back to your bank account.

³No fee was charged when I use Maybank account.

⁴The withdrawal processing time, if applicable, is normally within 2 – 4 business days.

Comments

After a cursory review, it seems that Fundaztic and Funding Societies Malaysia offer the highest number of notes but I can’t be sure about this.

From the table above, it seems that B2B FinPAL has the highest charge among the platforms, when everything is equal. Let me illustrate it with the following example. However, I must stress that I do not have any experience with any of these platforms except for Fundaztic and Funding Societies.

Platform	AlixCo	B2B FinPAL	Fundaztic	Funding Socities Malaysia	Nusa Kapital	QuicKash
Investment amount (RM)	1000
Loan tenure (months)	12
Interest rate (%)	10
Total interest (RM)	100
Fee	1% on total	30% on interest	1% on total	2% on total (1)	10% on return	1.5% on total (1)
Fee (RM)	11	30	11	20	10	16.5
Net repayment (RM)	1089	1070	1089	1080	1090	1083.5

¹Assuming highest fee is levied.

Personal experience

Now, let’s compare in detail the 2 platforms that I am currently using.

Platform	Fundaztic	Funding Societies Malaysia
Majority of loan tenure (months)	Longer (≥24)	Shorter (≤24)
Number of investment notes	Higher	Lower
Interest rate	Lower	Higher
Deposit required before investment	No	Yes

For the registration process, it is quite easy to open an account with either platform. They require some time (less than 3 days after furnishing the required documents if I remember correctly) for verification before the member is allowed to invest. The interfaces of each platform differ but it is not hard to get the hang of it after a few exploring sessions. Fundaztic has new notes almost weekly while Funding Societies Malaysia does not offer that many new notes. Both serve my need of investing in P2P financing well and each has its own advantage and drawback. I think I will continue to use both platforms in the future.

Advice

As with all types of investment, P2P financing entails risk of losing money. Thus, make sure you understand the investment notes before putting your money into them. Make use of the probability of default and grade of investment before making the decision. Out of the 2 platforms that I use, only Fundaztic provides this data. Feel free to explore the platforms mentioned here to find the most suitable one for you. Reminder: the companies employing this type of financing may have a higher risk of default as they usually cannot obtain fund through traditional institutions, thus the higher return.

Last but not least, bear in mind that the interest earned is taxable and it is required to be reported as income during tax filing!

Do share with us below if you have any experience in using these platforms. Happy investing!

Referral links

Below are the referral links to the platforms that I am using personally. By clicking on these links, I may gain referral rewards from your registration with the platforms. If you think I have done a good service in explaining the topic, please click on the links below if you are interested to register. Otherwise, you can always search the platforms with Google or click on the addresses in the first table (it would not benefit me in any way) and register yourself.

Funding Societies Malaysia: Link here – If you register and invest through this link, both of us will get RM 30*.

Fundaztic: Link here or use the invitation code: Cg6QS1 – If you register and invest through this link, both of us will get RM 50*. (Promotion starts again from 1 August 2018 till 30 September 2018.) Promotion has ended.

*While stock lasts. Terms and conditions apply.

(First update: 27 April 2018; Second update: 2 August 2018; Third update: 5 October 2018)