P2P Financing — First Case of Default
In my previous blog post, I mentioned I had my experience of deliquency in P2P financing, in one of the sub-investment in B2B Finpal. Well, the company had paid back the money, and the whole loan was completed.
As I said, I tightened the criteria by restricting the investments to high grade borrower as well as limiting the loan tenure to 3 months maximum. I had been monitoring closely on the status of these investments.
I guess the business environment must be quite tough out there. Funding Societies reported one of my loan investment had been categorized as Default because the borrower has been unable to repay the late interest charge carried from Nov 2018 & Jan 2019. Funding Societies is doing the necessary to deal with company.
The problematic loan was one of my earliest sub-investment. It had a loan tenure of 12 months. It is in the 6th payments. Meaning another 6 payments to go. Funding Societies reported amount in default is RM58. With my investment of RM1,000, this mean 5.8% gone if, in the worst case, it is going to be totally unrecoverable. Certainly I hope it won't. Anyhow, even if it does, it only means my total return is drag down by one investment. Right at the moment, Funding Societies reported my returns is 9.2% per annum. I started since July 2018, so it is only 7 months old.
As I read in Funding Societies' FAQ, default will somehow happen. Investors can reduce the risk by limiting the investment amount into each sub-investment, and spreading into more sub-investments. I further tightened the grade and tenure.
So far, I am quite satisfied with the return and how the funding companies had been communicating with investors. The auto-investment feature also relieved me from manual decision making.
If you too want to diversify some money into P2P Financing, you may consider them. All the two companies provide referral scheme. And mine are:-
Funding Societies:- http://promo.fundingsocieties.com.my/referral-program/?r=jjqsmwav
Funding Societies rewards the introducer and new investors with RM50 when new investor sign up and invest a minimum of RM1,000. So it benefits both of us.
B2B Finpal :- Put IN001029-Teo Soon Ann in the last column Referral Code when doing registration at https://prod.b2bfinpal.com/investor/registration.
