Moneysave P2P Crowdfunds SME with Malaysia’s 1st Business / Keyman RM1m Life Insurance Policy

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Malaysia, 30 July 2020 – Moneysave, an approved Securities Commission P2P Crowdfunding Platform announced the successful crowdfunding of its Investment Note No. 20 on 29/07/20 since launching on 05/05/2020. Its CEO & Founder, Vincent Soh believes that Moneysave is the 1st P2P Crowdfunding Platform in Malaysia to have crowdfunded an SME to purchase Business / Keyman Term Life Insurance Policy of RM1,000,000 coverage for the SME’s Director. This Note was crowdfunded up to 85% of Premium amount and was for a Selangor based wastewater treatment and construction company. As an asset class, the investment return for the investor for its 20th Note was 10.00% p.a. and had a risk reduction such as directors guarantee and post dated cheque collected from the SME.

Other Business Insurance that can be crowdfunded includes Trade Credit Insurance where businesses can protect itself against bad debts and delayed payments up to 90% of losses, Political Risks, Group Hospitalisation and Surgical, Project related and other general insurance classes.

“We are getting lots of inquiries from leading insurers and agencies to offer businesses with instalment plans up to 85% of Premium amount and 8 monthly instalments to assist SMEs to ease their cashflow” Soh, quips.

Vincent Soh, CEO & Founder of Moneysave

Moneysave is targeting to attract MYR 8 billion of Investments with target returns of 7%-16% on its platform the next 5 years to fund approx. 40,000 of SMEs in Malaysia i.e. at an average of MYR 200k of financial facility each.

For comparison, RM8bn is only 0.33% of the total size of Malaysia’s Unit Trust Investments at approx. MYR 500 billion in 2018 and the Malaysian Deposit base as at March 2020 at approx. MYR 2 trillion.

With its tagline of “Delighting You… Financially”, Moneysave aspires to be the top fintech / P2P Platform in Malaysia and Asia specialising in the Supply Chain Financing of Trade Invoice / Receivables Financing where Issuers or Small Medium Enterprises (SMEs) come to Moneysave’s platform to seek financing by selling their Trade Invoices or Trade Receivables at a margin of up to 85% of the invoice value. For example, an Invoice Value of MYR100k can be funded up to MYR85k. The tenure of funding is short term between 30-180 days only.

Moneysave hosted its 1st Investment Note which was rated ‘C’ by Moneysave at 4.55pm on 05/05/2020. The note with returns of 10.25% p.a. was 100% subscribed the next day before 11am and disbursed to the SME at 3.36pm on 06/05/2020 i.e. in less than 23 hours. The client was a Trade Mark and Intellectual Property specialist. For its 1st week of business, Moneysave has hosted investment notes for a variety of companies including Online Pet Specialist (‘A’Rating with 10.75% p.a. returns), Energy Saving Engineering Firm (‘A’ Rating with 9.50% p.a. returns) and has in its pipeline companies such as IT Hardware Supplier, Security Chip Specialists, Green Water Systems Specialists, Marine and Oil Bunkering Supplier, Accounting Firms and Telco Tower Contractor. The paymasters or clients of the SMEs are mostly BURSA Listed companies and Government Agencies. In order to lower the cost of financing, the SMEs would be rewarded with incentives if they perform or meet certain risk reduction criteria. The description of the various risk reduction criteria and its respective incentives awarded to the SMEs are as per Table 1 below. The maximum incentive that can be awarded to any single investment note is up to 7% p.a. at any time.

Table 1 : Moneysave’s Multi Risk Reduction  & Incentives to Issuers

No.Risk ReductionDescription of Risk REDUCTION Incentive Rate % (Up to)
1Invoice is INSURED against Bad Debt / Delayed Payments  @90%1) Issuer has Purchased Trade Credit Insurance to protect up to 90% of Losses due to the the following events :-
 a) Insolvency
Non-Payment as a result of Insolvency / Bankruptcy of the Buyer.
b) Protracted Default
Non-Payment after an agreed number of Months (usually after the Due Date of Invoice).

2) Issuer has also assigned the Policy proceeds and endorsed the Loss Payee Clause to the Platform on behalf of Investors.
2.50
2Buyer is Government of Malaysia / GLCs or its Agencies / SubsidiariesBuyer is the Government of  Malaysia or Government Linked Companies (GLCs) or its Agencies / Subsidiaries such as :

i) Government – Federal Ministries / Kementerian
ii) acceptable GLCs by Platform’s Credit Committee – eg. Telekom Malaysia, Tenaga Nasional, Malayan Banking Bhd. (Maybank), Petronas, Axiata Group, CIMB Group, Affin Holdings, BIMB Holdings , etc.    The corporates above have substantial shareholders from the Government of Malaysia / sovereign wealth funds and pension funds for example the Employees Provident Fund (EPF), Permodalan Nasional Bhd. (PNB), Kumpulan Wang Persaraan (KWAP), Lembaga Tabung Haji and Lembaga Tabung Angkatan Tentera (LTAT).  
2.00
3Buyer has >RM50m of Cash & Cash Equivalent or Networth >RM10mIssuer is a Supplier or Contractor to a subsidiary or the holding company that has > RM50m Cash & Cash Equivalents or a Networth of >RM10m for latest 2 out of the 3 available Past Years audited financials from Credit Reporting Agencies.

For example, if current evaluation date is 05/05/2020, the Platform can still accept Financial Reports for Financial year Ended 2018 and 2017 as Financial year ended 2019 usually is not readily available.
1.00
4DIRECT PAYMENT from BUYER + NOA Accepted by Buyer1) Buyer has agreed to Pay Invoice Proceeds Directly to the Platform.

2) Issuer has Assigned via a Notice of Assignment(NOA) to the Platform all their rights, title and interest to and in all amounts payable to the Issuer relating to the Approved Receivables pursuant to the relevant Investment Note.
2.00
5Key Director’s and/or 3rd Party GUARANTORSKey Director’s and/or 3rd Party GUARANTORS are given1.50
6Invoices are VALIDATED with the BUYERIssuer’s Invoices are validated with the Buyer’s Accounts / Procurement Dept.0.50
7Only Notice of ASSIGNMENT (NOA) to Buyer1) Issuer has given Notice of Assignment (NOA) to the Buyer assigning to the Platform as assignee for the investors all their rights, title and interest to and in all amounts payable to the Issuer relating to the Approved Receivables pursuant to the relevant Investment Note.0.50
8Others risk REDUCTIONS to PlatformAny other risk REDUCTIONS offered by the Issuer and approved by Moneysave Credit Committee.2.00
  Estimated Risk REDUCTION Incentive(Max 7%)

Table 2 below provides a snapshot view of how Investors can select the Investment Notes that meet their Investment criteria. Moneysave would review and revise these criteria subject to investors and issuers feedback every 3 months. From the sample case study below,

Table 2 : A Snapshot Sample of Different Notes with Key Risk Reductions Criteria