FUNDING Societies, a Singapore-based peer-to-peer (p2p) lending platform, has cracked the S$100-million mark in total crowdfunded loans for SMEs (small and medium enterprises) across Singapore, Indonesia and Malaysia.
This is the highest total crowdfunded amount achieved by any p2p lending platform in South-east Asia, Funding Societies said on Tuesday.
The platform also reportedly expanded its crowdfunding book by 400 per cent in 2017, while maintaining a default rate of 1.5 per cent.
Kelvin Teo, chief of Funding Societies, told The Business Times: "Achieving S$100 million in loans is a critical milestone because it confirms the product-market fit, and that there is indeed significant underserved SME credit demand which crowdlending is well-positioned to serve."
Effective returns for investors - after default and fees - are about 14 to 16 per cent across the three markets, while the number of unique issuers is 300 in Singapore, 50 in Malaysia and 1,200 in Indonesia, Mr Teo said.
"Crowdlending has become even more relevant today, given the increase in market awareness and regulatory clarity."
When asked if the rise of cryptocurrency crowdfunding platforms will affect the popularity of p2p lending platforms, Mr Teo said that cryptocurrency crowdfunding platforms "serve a different need, require different capabilities, and may not be suitable for many SMEs now".
Founded in early 2015, Funding Societies enables SMEs to secure business loans from retail and institutional investors. Businesses can get loans ranging from just S$5,000 to up to S$1 million at "reasonable rates of interest", said the startup.
Most of the SMEs which Funding Societies has funded do not receive adequate financing through traditional options. Others have existing bank loans but approach Funding Societies for fast and short-term bridging loans, the startup added.
In August 2016, Funding Societies raised S$10 million in Series A funding led by Sequoia Capital for expansion into Indonesia and Malaysia.