Saturday, February 21, 2015

Singapore's Very Own P2P Lending

For a while now I've known that places like the US and UK has been having quite a strong and vibrant P2P lending scene.

Essential, it's about making private loans and earning an interest on it. Needless to say, this is very risky.

Singapore has it's own version and it is called MoolahSense.

They are currently running a campaign to raise money for a media and design school planning to expand its operations. And no, I did not get paid at all to talk about them. I just think that this is a very cool idea. Even MAS thinks so. They are taking comments from the public so that they can come up with a proper policy stance for this.

With this campaign, creditors can look to gain up to 12% of interest with a 1 year loan, or lower if there is a high demand. A high demand means that creditors think that the risk of loss is low and thus are willing to accept a lower interest rate. This is a win for the debtor, since they will eventually pay a lower cost for debt.

I don't want to talk too much about the specific campaign because I can't remember all the terms and agreements that I agreed to when I signed, but I'm sure there is something against sharing non-public information.

However, I just want to share some of my findings that might be useful. Based on Reuters, these are the yield spread based on credit rating, but for Industrials. (industrials are more cyclical than service, right?)


I also have the default rate of the different credit ratings of S&P over the years of 1981 to 2011. Realistically, I think that companies would fall within the red box range. Slightly riskier than investment-grade, which is why they cannot get cheaper cost of debt, but not a basket case scenario either.


Finally, the last piece of the puzzle is the credit rating assigned that local companies would have.

If you can add A + B + C together, all separate information, I think some people might get what I am trying to hint. Of course, you have to do some brain work yourself.

Personally, given the large yield spread over the implied level of default risk, I think that the current campaign being run on MoolahSense looks very attractive. Of course, don't put all your eggs in one basket. I have not decided yet if I want to take part in this, but I must admit that it does look like a pretty decent opportunity.

Would you lend a company money for a year to get back 12% return? Eager to hear what others might think about this!

8 comments:

  1. Hello Everybody,


    My name is Mrs.Juliet Quin. I live in Canada and i am a happy woman today? and i told my self that any lender that rescue my family from our poor situation, i will refer any person that is looking for loan to him, he gave me happiness to me and my family, i was in need of a loan of $30,000.00 to start my life all over as i am a single mother with 3 kids I met this honest and GOD fearing man loan lender that help me with a loan of $30,000.00 Canada Dollar, he is a GOD fearing man, if you are in need of loan and you will pay back the loan please

    contact him tell him that is Mrs.Juliet Quin that refer you to him. Contact Mr.Lim Koh via email: (lim.koh56@yahoo.com)

    ReplyDelete
    Replies
    1. No, you are a fucking spammer from Nigeria, IP address 41.206.11.21.

      Anyone stupid enough to contact "Mr Lim Koh" through that email is beyond the normal limits of human stupidity and I wish you the very best of luck, because you will need it.

      Delete
  2. Good Everybody,
    I am Mrs Shorn,currently living in Canada,I am a widow at the
    moment with three kids and i was stuck in a financial situation by
    august 2014 and i needed to refinance and pay my bills for my son
    medication. I tried seeking loans from various loan firms both private
    and corporate but never with success,and most banks declined my
    credit. But as God would have it, i was introduced to a man of God a
    private loan lender by a friend named Mr Dan and i got a loan sum
    of $700,000USD and today am a business owner and my kids are doing
    well at the moment. So dear,if you must contact any firm with
    reference to securing a loan with low interest rate of 3% and better
    repayment plans and schedule,please contact Mrs Jasmie Ralston She
    doesn’t know that am doing this but am so happy now and i decided to
    let people know more about her,she offers all kinds of loans to both
    individuals and company and also i want God to bless her more. You can
    contact her through her email via: amacoloancompany@cash4u.com or amacoloancompany@gmail.com

    ReplyDelete
    Replies
    1. Spammer from Ghana, IP 41.190.70.182.

      Delete
  3. I am Leon Lim i was in need of a loan of $30,000 USD and was scammed by those fraudulent lenders and a friend introduce me to Mr Akim Lim,and he lend me the loan without any stress,you can contact him at akimlim_loanfirm19@yahoo.com

    ReplyDelete
    Replies
    1. Spammer from Ghana, IP 41.215.169.3

      Delete
  4. Specialist in Financial issues.

    Are you in debt? Do you need an instant funding? Do you dream of owning a house, Car and good Business? Do you need a loan ahead for the Christmas family vacation? Have you been in search of a legitimate loan and been turned down severally? If YES" Search no further. We offer Personal/Commercial loans at 2% interest rate without collateral. get instant Approval even with bad credit. Serious and interested applicants should please contact us via email today:lim_koh@yahoo.com.sg and be free from all your financial troubles. NOTE:we will save you from payday loans that are making billions from the prey of the poor.
    You will be contacted within 24hrs with the loan terms and conditions as soon as the details have been received. Don't waste another moment. Contact us today for the lifeline you and your home need.

    Best Regards.

    Mr.Lim Koh

    ReplyDelete
    Replies
    1. Spammer from Nigeria, IP 41.220.68.243

      Delete

Observe the house rules.