DESPITE experiencing a slow growth rate due to the COVID-19 pandemic, peer-to-peer (P2P) financing platform Fundaztic has given the assurance that they will continue providing and serving as many underserved small and medium-sized enterprises (SMEs) as possible.
“Given the fact that financial institutions are tightening their lending criteria especially for new bank borrowers, we see this as an opportunity to be able to provide financing for more local businesses and assist them through these trying times,” said Fundaztic CEO Calvin Foo.
However, the pandemic and the ensuing industry challenges did not make things easy for the platform or anyone in the industry for that matter, he contended.
“The biggest challenge we experienced is definitely trying to provide relief measures for our issuers that are impacted due to the various movement control orders (MCOs) while concurrently being transparent to our investors and ensuring that their repayments and obligations are met on a timely manner,” he told FocusM.
“The Fundaztic team’s ability to balance these two challenges was key to maintaining the issuers and investors’ trust in us.”
Speaking of relief measures, Fundaztic has been providing rescheduling and restructuring (R&R) relief for their affected issuers to assist them with their business’s cashflow throughout the pandemic.
“However, we do not provide a blanket moratorium as we need to consider the interest of our investors as well. Therefore, any approval on an R&R facility would be on a case-by-case basis only,” Foo stressed.
On the outlook for the P2P financing sector in the medium and long term, Foo believes that the industry will continue doing well.
“With the country well on its way to achieving herd immunity against COVID-19, I expect the market to reopen very soon and the livelihood of the rakyat will slowly but surely return to normal.
“The digital adoption and acceptance rate for both individuals and business owners would have increased considerably in the last two years.
“Moreover, the financial institutions’ fixed deposit (FD) rate is expected to remain in place for the foreseeable future and hence, investors will be looking for alternative investments to generate higher returns.
“These factors demonstrate the potential for exponential growth of the P2P financing sector in the next two to three years,” Foo concluded. – Aug 5, 2021.
