p2p lending

P2P Lending: How It Works, Top Platforms in Singapore

With the rise of technology, innovation on the commercial platform is set to follow suit. Coming into digitalization, financial technology (FinTech) has been the forefront of e-commerce for the past decade and is now the trend for conducting business.

Peer-to-Peer (P2P) lending, one of many FinTechs available, has been appealing to a larger set of audiences ranging from financial giants to your everyday consumer. Its efficiency and convenience in transferring finances, whether to borrow or lend money, it is far from the traditional way of coursing through the bank.

And with Singapore’s strong reputation as an established financial hub in the region, foreign investors tend to plant their regional head offices in the country. Having a secured foothold, companies are confident more than ever to venture into P2P lending and transact worldwide through a single digital platform.

What is Peer-to-Peer Lending?

It is a type of Financial Technology that enables individuals and corporations to obtain loans from other individuals and corporations without the need for the traditional intermediary such as banks. It has been utilized and provided by financial giants such as Upstart, Streetsahres, and Lending Club among others despite only have been existing since 2005.

How it works

In this platform, lenders have the opportunity to make their funds available to finance the loans of others – in return, the money that was shed out will incur interest. In this setup, it removes the painstaking process of traditionally borrowing finances from banks.

There will always be two parties to a P2P exchange, there is the borrower and the lender. The borrower can be a business entity or even an individual who is looking to borrow finances. The lender on the other hand is an investor willing to shell out their money with hopes to gain a profit in the form of interest.

P2P online platforms can potentially provide higher returns, but like a double-edged sword, it can also come with high risk with some there is no recovery from. There could be instances, due to unforeseen circumstances, the borrower will no longer be able to provide the agreed return let alone the capital – so always check the default rates before you give access to your funds.


Sometime in 2019, there have been several reports of a borrower defaulting in China involved in high-profile P2P lending. Also in 2020, when the COVID-19 struck the country, CoAssets faced difficulty as default rates for P2P loans started one after the other. CoAssets was one of the biggest P2P lenders in Singapore at the time.

As an investor, these are the risks that you have to factor in but one way to lessen these risks is to ensure that you are investing using a P2P platform that is regulated by the Monetary Authority of Singapore (MAS).

Loan Usage

There is no limit as to how P2P loans can be used, as one would take loans from banks or moneylenders, your P2P loan can be used either for auto financing or home improvements. 

Current trends indicate that borrowers currently utilize P2P platforms for the primary reason of paying off bank account arrears. While some may just need access to funds to help solidify their personal finance.


Jumpstart your P2P Know-how

At a glance

A P2P lending platform basically connects those looking for extra money directly to investors with each platform setting its own rates and terms that make the transactions possible. Some platforms base the interest rate on a wide range of rates based on the credit rating of the applicant. 

Initially, an investor will have to open an account on a specific platform and deposit a chunk of their finances to be utilized as loans. Borrowers can then post a financial profile with a designated risk category that will be the basis for the interest rates they pay. Offers will be made and borrowers can review the said offers and accept the most appealing offer to them.

Utilizing the platform

The transfer of funds and the monthly installment for payments are coursed through the platform. However, these terms can be pre-determined or negotiated by the lender and borrower. 

For P2P lending platforms, the rates could be lower or higher compared to bank rates depending on the credit rating of the applicant. For investments, P2P can provide higher returns that far exceed those through certificates of deposits (CDs) or traditional savings accounts.

How do P2P lenders earn?

P2P platforms earn from the fees they impose either on the side of the investor or the borrower. Fees that can be charged include, but are not limited to, origination fees, late fees, transaction fees, and monthly interest payments from repayment of the principal amount upon maturity.

Check out also: The Moneylenders Act and 24 hours Money Lender in Singapore.

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5 P2P lending platforms in Singapore to Check Out

Like most banks and moneylenders, various lending platforms provide a wide range of options both from the perspective of the investors and the borrowers. Here are the top 5 platforms to consider.

1. Funding Societies P2P Lending

Funding Societies was founded in 2015 and was the first among the P2P Lending platforms to use a government-registered escrow account for the security of funds. It has three (3) financing options to choose from.

Available funding

One is the FS Bolt which offers fast approval of P2P loans within two (2) hours for financing up to $100,000. Another is the Business Term Loan with P2P loans going as much as $3,000,000 for secured loans and $1,500,000 for unsecured loans. Lastly, there is Invoice Financing where businesses are eligible to receive up to 80% of the invoice value.

Minimum investment amount

Funding Societies however requires a minimum investment amount of $20. This, in fact, is the lowest minimum investment amount among all P2P lenders in the country.

2. BRDGE P2P Lending

 Established in 2013, BRDGE has a default rate of 0.077% and has already provided funding for Singapore companies amounting to S$72 million. It previously goes by the name of SeedIn.

Available funding

Business borrowers utilizing BRDGE can be assured that the finances could be released before the 7-day business day mark. It offers P2P loans up to $2 million with 3 to 12 months tenure.

Minimum investment amount

Investors with BRDGE will need $1,000 to jumpstart their investment and possible returns of 5% to 17% per annum after deducting all the fees. Ever since its founding year, it has a record of providing 100% repayment to its investors.


Utilizing this platform, an Account Management Fee will be charged for platform services and for the monitoring of loans. There will also be a 15% fee on all loan repayment made by the borrower.

3. Validus Capital

Validus Capital was founded in 2015 and has been easily the largest P2P lending platform in Singapore. It has financed over $250 million to Small and Medium-sized Enterprises (SMEs) way back in July of 2019.

Validus Capital is one of the P2P lending platforms that is licensed by the MAS. It is backed by Vertex Ventures, a subsidiary of Temasek Holdings, which is considered a giant in terms of capital investment.

Minimum investment amount

Investing with Validus Capital requires a minimum investment of $1,000 and is currently open to Accredited Investors exclusively. A minimum total portfolio size of $50,000 is also required. Also, for all returns, a flat fee of $200 will also be charged.

Available funding

SMEs with Validus Capital can gain access to finances up to $500,000 with no required collateral. It also prides itself on a 48-hour time frame for the approval of loan requests. Products offered by Validus Capital include invoice financing, working capital loan, and purchase order financing.

4. MoolahSense P2P Lending

MoolahSense was the first digital lending platform that received a full Capital Markets Services license from MAS. Founded in 2013, it provides businesses and investors with two financing options. It could either be through a first come first serve basis or through an auction.

Minimum investment amount

For investors, MoolahSense requires $100 as the minimum investment amount for promising returns of 24% per annum. It charges $1 of repayments to serve as Investor Servicing Fee.

Available funding

Business borrowers are allowed to access finances ranging from $50,000 up to $5 million under Small Offers Exemption. Finances above $5 million are also available under Private Placement Exemption.

Invoice financing is also available for business borrowers and finances ranging from $15,000 and above could be made available.

All the products the MoolahSense offers for business borrowers can be released within 5 business days.

5. Minterest

Founded in 2017, Minterest prides itself in including unbanked and underserved businesses in the financial race. It is a multi-awarded P2P lending platform that is a member of the Singapore Fintech Association (SFA).

Minimum investment amount

For investors, Minterest requires a minimum investment amount of $500 and allows their investors to spread their investments to multiple loans simultaneously. Minterest promises interest from returns up to 18% per annum on investment and it also charges a very low service fee of 15% for the interests.

Minimum loan amount

Business borrowers on the other hand are required to have a minimum loan amount of $50,000. However, loan amounts lower than $50,000 can be considered but it is reviewed on a case-by-case basis. Financing on these loans include invoice financing and corporate loans.

Interest rate

The interest rates for P2P loans range from 8% to 18% per annum. Minterest also charges processing fees that are calculated based on the entire loan amount and should be paid upfront when the loan amount is provided. The time frame for fund release is around 10 business days.


P2P lending has redefined how freely finances move from one company to another or one individual to the next. For investors, much like every investment, it comes with calculated risk accompanied by promising rewards and the only defining difference would be where you invest your finances. For borrowers, a variety of platforms, and with a wide range of investors currently available for grab, you only have to be smart in involving the decision-making process.

Key Takeaways

  • Investments can provide higher returns compared to traditional savings accounts. You only have to be smart on what platforms you invest your finances in.
  • P2P lending is a form of FinTech that allows individuals and corporations to borrow money from other individuals and corporations without going through the bank as middlemen.
  • Borrowers utilizing the P2P lending platform would be able to find alternative loans with much lower interest rates than those they would be able to find through banks.

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