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In A Month, I've Invested RM5,500 In P2P Funding. Let's Just Say, I'm Convinced.

Investment opportunities have become more advanced with the introduction of peer-to-peer lending and Malaysia is not short of P2P lending platforms.In this article, I compared two lending platforms (Fundaztic and Funding Societies) work and their benefits. 

As a newbie who has just started to delve into the world of investments with my first investment into robo-advisor startup, StashAway, I’ve come to realise that investments aren’t just limited to the traditional methods of stocks and Forex trading.

One such opportunity to invest is through peer-to-peer lending, a type of crowdfunding which can help individuals or businesses request funds from investors via a digital platform. The P2P lending space in Malaysia has seen exponential growth with 2,000 funding campaigns run across the six licensed players in 2018, which was a 300% increase compared to 2017.

I wanted to try my hands at P2P lending by signing up with two of the more well-known platforms—Fundaztic and Funding Societies. In this article I’ll be putting my money where my mouth is by comparing both platforms as an investor. For a quick breakdown of what each platform has to offer, you can scroll to the end of the article.

Disclaimer: This article was not sponsored, and the funds for investing came out of my own pocket.


Investors on Fundaztic invest in notes that are given out by the issuer (companies). It’s a short-term debt security with a maturity of between 3 months to 36 months, but typically the tenure on the platform is around 36 months.

Investors can register on the platform for free and invest into notes from as low as RM50 but do remember that you won’t get much returns back if your investment amounts are low.

In return for investing into notes, you will get back the amount you invested through fixed monthly repayments in a pro-rated (Principal + Interest) repayment and minus the platform fees (1% of monthly returns).

The low barrier of investment and zero deposit fee allows almost anyone who has RM50 to invest into any note. However, Fundaztic provides information for investors on the risk for each issuer in the form of a Probability of Default percentage (PD%). According to the Fundaztic website, PD is directly taken from the Credit Bureau Malaysia (CBM) report which the platform uses as part of its credit evaluation process.

In short it means that the PD can be used to gauge the likelihood of the particular credit of the SME turning default within the next 12 months based on information received from a range of business information databases.

Take for example, in the image above, note 528 has a PD of 9.28%, which means the particular note has a 9.28% likelihood of defaulting within the next 12 months. This means, the lower the PD, the lower the risk and the better the grade.

The platform also has a Risk Profiling feature that allows investors to understand their risk so that they will know which sort of grade they should invest in.

Another feature that’s on the platform is Smart Invest. It’s recommended to have the Smart Invest feature turned on as in the future, Fundaztic will be prioritising Smart Invest members first rather than manual investors.

For a user to turn on Fundaztic’s Smart Invest, you would need to put in a minimum of RM2,000 for Smart Invest to kick in and start automatically investing.

“This is not based on a business decision but mainly to ensure our issuers manage to raise their funds as quick as possible and the way to do this is to prioritise committed money over un-committed money,” said Fundaztic when asked about this decision through their Facebook Messenger.

It’s also good to note that Smart Invest kicks in every hour and it is a system-wide process where it temporarily blocks all action to avoid any hiccups for around 5 minutes.

Fundaztic At A Glance
Pros Cons
Shows investors the risk of default for each issuer Minimum RM2,000 for Smart Invest to activate
No deposit required to open account Long duration to get principal + interest back
Minimum of RM50 to invest Not very user-friendly platform and app
Helps investors to understand their personal risk profile and appetite Hourly system wide process stops all action on platform for few minutes

Funding Societies

The concept of Funding Societies is similar but it has two forms of investments: Business Term Financing and Invoice Financing.

Business Term Financing is similar to Fundaztic’s platform, the money raised is used as working capital to pay for, small asset purchases, capital expenditures or business expansion. It has fixed interest rates, with monthly schedules and a set maturity date.

Invoice Financing is a product where the sellers (“Issuer” in this case) sell their future receivables or invoices that the seller’s issue to their customers (“Buyer”) to get immediate cash.

Investors will only get their payment at the end of the financing tenure rather than monthly payments as it’s much shorter ranging from 30 to 120 days compared to Business Term Financing that ranges from 1 and 24 months.

There are also no risk rates such as the Probability of Default on Fundaztic but they do have a Fact Sheet for each company showing their finances (there are a lot of numbers but it’s recommended that you do check that out).

The lowest amount that you can invest on any of the business terms is RM100 but to even activate your account, you would need to deposit a minimum of RM1,000.

However, there’s no minimum amount that you would need for their Auto-Allocation feature to kick in. It’s also recommended to have it turned on as you would get priority to invest into the financing term but don’t worry if you’re a manual investor, as they will allocate a percentage of the financing term amount (between 20% to 40%) for manual investing.

Funding Societies At A Glance
Pros Cons
Auto Invest requires no minimum amount Minimum RM1,000 deposit to open account
Short duration to get principal and interest back Investors required to do personal due diligence to understand risk for each company
Frequent new investment opportunities Different and higher service fee structure

Should You Invest?

In numbers (based off their app as of time of writing), Funding Societies has successfully raised RM1.33 billion on their platform (across Malaysia, Singapore and Indonesia), with 255,068 business terms financed and 0.88% default rate. Fundaztic has raised RM40.6 million, with 514 notes funded and a 3.24% default rate.

Generally, Funding Societies’ investment opportunities are much higher in amount (usually up to RM1 million) and shorter in tenure (typically within 12 months) as compared to Fundaztic where the amount is smaller (usually up to RM200,000) and tenure is longer (normally 36 months).

Based on those statistics, both of the platforms have different approaches to P2P lending; Funding Societies aims for a larger amount to be funded, while Fundaztic goes for numbers of SMEs to be funded.

I’ve put in a total of RM2,000 in Fundaztic and RM3,500 in Funding Societies over the span of 1 month, and so far I would say that I prefer using the latter more as the platform/app is more user-friendly and the returns are much faster.

Although Fundaztic payments are done monthly, to get back your principal amount with interest would take a few years compared to Funding Societies where you’ll get back principal plus interest usually in less than a year (depending on investing in Business Term Financing or Invoice Financing).

I would suggest those looking for quicker returns to invest in Funding Societies while those who would like to play it safer and choose their risk (based on Fundaztic’s Probability of Default) and don’t mind the longer waits for returns to go with Fundaztic.

Here’s a quick rundown of key features on Fundaztic versus Funding Societies:

Fundaztic Funding Societies
No deposit needed to open account RM1,000 to open account
Minimum investment of RM50 per note Minimum investment of RM100 per note
Business Term Financing only Business Term Financing and Invoice Financing
Longer investment periods of 3–36 months (usually 36 months) Shorter investment periods of 1–24 months (usually 12 months for Business Term Financing and 1–3 months for Invoice Financing)
1% platform fee Platform fee for Business Term Financing (0.16%–1.83%) and Invoice Financing (15%)

The best method is to put money into both platforms and set up the auto invest features to diversify your investments as it’s never good to put all your eggs in one basket.

If you’re asking about my returns, I’m only on my second month in and I’ve only received a few ringgit, so we’ll see how it goes. For now, I am planning on depositing more money into both platforms over the next months and tracking how that goes.

If you would like to find out more about Fundaztic, you can check out their website here.If you would like to find out more about Funding Societies, you can check out their website here.

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