Funding Societies

It has been a while since I last reviewed an investment product. This shall be an unbiased review since I am not paid by anyone to write this.

Funding Societies is a Peer-to-peer lending company based in South-East Asia with headquarters in Singapore. You can read more about their awards, achievements and background history here.

Here, I will be focusing on how much I have grown my money in this platform. Everything here will be based on hard numbers from my own investing experience. Do note, however, that everyone has their own experiences and it is up to one to infer from my experience.

Without further ado, here’s my first P2P company, Funding Societies’ review!

I first opened my account in mid October 2017. I was greeted with some legal documents that I had to sign electronically before embarking on my investing journey at FS. As usual, I just signed those without reading them. So much for becoming a lawyer in the future…

Screenshot 2018-10-23 at 6.27.57 PM

Here’s a screenshot of the legal ritual. Of course, after this, you will have to give up all your personal information to them so that they can run some anti-money laundering assessment of you.

Finally, it is time to start investing!

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I deposited a minimum of $1000 immediately but didn’t get to invest until the following month. So, one must understand that one can only invest when there are opportunities to do so. The rate of flow of available term loans depend on the number of businesses that passes the credit analyses done by the due diligence team at FS.

In the beginning, I read and analysed the financial statements of those borrowing companies by myself as I did not trust FS completely. Here is an example of a financial statement. Screenshot 2018-10-23 at 6.47.54 PM.png

Of course, sensitive materials are blurred out as they are only exclusive to potential investors and not open to general public. Rest assured though, that they are very comprehensive assessments indeed.

Subsequently, after realising that most companies that FS filtered through are quite legit and stuff, I decided to try their auto-invest feature.

Screenshot 2018-10-23 at 6.53.55 PM

This auto-invest bot/feature extends to all 3 of their current investment arms- Business Term Loan, Secured Loan and Invoice Financing. As seen from picture, you can customise your own auto-investment criteria. But as you can see, the lazy me just max everything.

I also subscribed to their notifications for available loans to invest in. See below.

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Now the final of all, what are my returns like?

Screenshot 2018-10-23 at 7.47.26 PM

Based on their calculations, my annualised portfolio performance is at 11.56%. Quite a decent return for quite a passive way of investing in local SME companies. However, I am sure that this is before service charges by FS. The net return should be lower accordingly.

Update: A reader wanted to know about the default rates and late repayments rate. So, here it is. 0% default rate and 1.8% late repayment rate for 60 loans thus far. The 1.8% is calculated by taking (total late repayment fees paid)/(total income received)*100.

Screenshot 2018-10-26 at 1.08.57 AM

Will SG Finance Guy recommend this?

Honestly, I recommend to allocate only 1% of your total portfolio in P2P lending investments at best. Even better, try not to invest in P2P lending at all. I will try to explain why in my follow-up post on P2P companies later on.

Even though the returns are rather great, I do see risk-adjusted returns being quite low. Hence, I have been personally trying to de-risk by cashing out my returns from the 1 year of investing at FS.

For current P2P investors, you will be interested in knowing why I do not recommend P2P to the average joe. However, I do admit that FS is one of the best P2P platforms out there. It deserves my approval and I will definitely recommend FS if one wishes to try out P2P investing!

PS: This review is more of a prelude to my reflections on P2P lending in general, which will be my next post. Do look out for that and see you next time!

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