Peer-to-Peer Financing (P2P)
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PEER – TO – PEER FINANCING (P2P)
P2P financing offers an alternative access to funding particularly for businesses and provides retail investors another investment option.
P2P financing is essentially a lending and borrowing activity between businesses and investors, facilitated through an online marketplace i.e. a P2P financing platform operator. The funding needs are met by a group of investors putting in small amounts of money for a particular business need that has been vetted by a P2P financing platform operator.
| Role of a P2P Financing platform operator? | What does it mean for businesses? | What does it mean for investors? |
|---|---|---|
| Undertakes the role of a “marketplace provider” for both businesses and investors to utilise the platform subject to certain rules. | Offers great funding opportunity to business owners for stable cash-flow | Allows investors to diversify their investments to suit their goals and risk profiles. |
| Must be registered with SC. | There is no funding cap imposed on businesses utilising P2P Financing platforms. | Investors will be able to receive amount of periodic repayments according to the predetermined payment schedule of the investment note. |
| A business will need to raise at least 80% of its target financing amount before the funds are released (any excess amount raised will be returned to the investors). | There is no investment limit imposed on the investors, but retail investors are encouraged to limit their P2P investment exposure at RM50, 000 at any given time. |
Find out more about the list of registered P2P Financing HERE.