135 Funding Societies—my first investment in P2P financing company

Funding Societies—my first investment in P2P financing company

Peer-to-Peer (P2P) financing is a new type of investment approved by Securities Commission Malaysia in 2016. Meaning it is a regulated investment scheme in Malaysia. All these while, our investment vehicles are mainly built around bank deposits, bonds and equity. Since we see volatility in stock market, some investors may like to diversify into other investment vehicles.

Investopedia defined P2P financing as:
Peer-to-peer (P2P) lending is a method of debt financing that enables individuals to borrow and lend money without the use of an official financial institution as an intermediary. Peer-to-peer lending removes the middleman from the process, but it also involves more time, effort and risk than the general brick-and-mortar lending scenarios. P2P lending is also known as social lending or crowdlending.

The first time I get to know P2P financing and equity crowdfunding was during a MFPC seminar in 2017. At that time, I remember Crowdo, FundingSocieties talked about how these types of investment works and how investors can potentially benefit. But I did not invest into it because they were relative new and I am a bit uncertain. After all, I am a timid investor.

The stock market is quite volatile since beginning of 2018. I started to look into other alternative investment vehicles. My mentor, who invested in P2P during the mentioned seminar, said the P2P he invested is giving quite consistent regular income. So, he recommended me to Funding Societies.

Funding Societies is one of the six registered P2P lending company. It claims to be one of the biggest in the industry.


Opening Funding Societies account

Opening a Funding Societies account is relatively easy. I only have to click the referral link my mentor sent to me. Then I simply have to fill in the required info, upload my NRIC, and also bank in minimum RM1,000 for investment purpose. The website said the process should take 2 working days for their approval. In my case, it took me about one week.

After account being approved, I log in to setup auto investment system. I have to choose the lending type, the tenure of lending, the interest rate I want, and the industries of lender.

In term of lending type, I can choose Business Term Financing and Invoice Financing. Business Term Financing lends to business that need funding for further expansion, the tenure is range from 1 month to 18 months. Invoice Financing lends to business that sell their future receivables or invoices to get immediate cash; the tenure is between 30–90 days. Well, I chose both.


The first investment

The auto investment kicked in when there is one opportunity yesterday (Aug 1). For this investment, the amount of RM100 is the minimum investment amount I preset. I remember the speakers said it is better to diversify, because a business can still fail or default on payment.

So, for this first investment, I have to monitor the how is the return. If everything goes well for the next 12 months, this financing will give me simple interest rate of 14% while the effective interest rate is 25%. To me, that is very high.

I am looking for seeing more financing opportunities. If the default is low, I can invest more. I am also eager to see how the account can grow.


Referral Scheme

I join Funding Societies on my mentor's referral, both of us will get RM50 when RM1000 is invested. Nice right? Likewise, I can refer friends to join Funding Societies — for me and friends to enjoy RM50 referral fee. My referral link will be

http://promo.fundingsocieties.com.my/referral-program/?r=jjqsmwav


Note: on Aug 2, 2018, LendingStar was issued Cease Order by SC because the firm was not registered to operate a recognised market, and was providing auto-invest facilities without licence or registration.