Frequently asked questions & answers for investors on Fundaztic platform.
We have created a step-by-step guide on how you can register as an investor on Fundaztic.com.
Click here: Individual Registration Guide
You can click “verify” in your “personal details” or “business details” only after we have performed a transaction to the account number provided. Therefore, you will not be able to “verify” your account immediately. Please allow at least 1 working day for the “verify” link to appear.
Bad Rate %:
Bad Rate is used to predict the likelihood of the particular Note turning Bad within the next 12 months and is directly taken from CTOS SME Score where Fundaztic uses it as part of its credit evaluation process. Bad is defined by CTOS as such:
1) Missed payments with outstanding more than RM200 for 90 days or more
2) Written Off
3) CCRIS Legal Status (Bankruptcy, Summons, Auctions, etc)
The Bad Rate by CTOS is derived from an analytical study on 1 million SME entities from BNM (BNM SME Definition: Under RM50 Million Turn over) using CCRIS and CTOS data. For example, a 5% Bad Rate predicts that the Note will have a 5% chance of defaulting.
You will receive your return of investments through fixed monthly repayments. For example, if your investment has a tenure of 12 months, you will receive a monthly pro-rated (Principal + Interest) repayment in to your Fundaztic Account over the 12 months period.
You can then choose to withdraw or re-invest into other Investment Notes after you receive your monthly repayments.
Everyone (Individual and Institutional) can apply to become an “investor” by submitting required information via Fundaztic’s P2P financing website. To begin the application process, sign up and login to the website, then, click on the “Invest” link. Once your application has been approved you will be a qualified investor and you will be able to make investments.
“Investment note” refers to the promissory notes sealed between the “issuer” and “investor” to manage the risks involved in funding the “issuer”. It is a short term debt security with a maturity of between 1 month to 36 months. This legal document obligates the “issuer” to repay the funding that it has obtained via the investments of multiple “investors” based on specific terms and conditions of repayments failing which, depending on severity, Fundaztic.com may seek to pursue recovery actions permissible by law on behalf of the “investors” to recover funds issued.
YES. You will be required to declare your returns of investments for tax computation. Please check with your tax consultants on how to do so.
In general, the biggest risk that an investor would need to bear with is repayment/default risk whereby the issuer may not be able to repay a fund in full. This could be due to a variety of reasons.
Therefore, it is advisable for all investors to make a careful selection of their investment notes by thoroughly going through the profile of the issuer especially the Bad Rate %, purpose of funding, tenure of business as well as tenure of funding. Most importantly, it is advisable for all investors to select issuers with different risk grades to invest in to diversify the risks. To diversify means to spread your investment across as many notes as possible in terms of number as well as type of issuers. It is not advisable at all for any investor to “put all their eggs into one basket” by focusing on similar types of issuers because this increases non-repayment risks since the issuers may face similar issues. Although higher risk notes offer higher returns of investments, it is never advisable to put all your investments into these types of notes because of the risk factors.
Diversification of investment can be done not just by putting in fresh funds but also by using the returns of investments to make new investments. Since Fundaztic’s minimum investment amount is only RM50 per note, it is easy to use returns of investments to re-invest and thereby managing the risk of overall risks. Re-investing using your returns of investment allows you to stretch your initial capital further to maximize on returns.
**Investment made through our platform is not covered by the Capital Market Compensation Fund**
Flat or Nominal interest rate is defined as a stated interest rate. This interest works according to the simple interest and does not take into account the compounding periods.
Effective interest rate is the one which caters to the compounding periods during a payment plan. It is used to compare the annual interest between funding with different compounding periods like week, month, year etc.
In general, the stated or nominal interest rate is less than the effective one. And the latter depicts the true picture of financial payments.
For peer-to-peer financing in Malaysia, as it is regulated by the Securities Commission (SC) and grounded by a full set of guidelines of which amongst others require the platform to establish and maintain one or more trust accounts in a licensed institution for the monies received as repayments to investors. The platform is not allowed to withdraw from or deal with investors’ monies in the trust account(s) except for the purpose of making a payment to the person entitled thereto (issuer, investor or the operator) or that is otherwise as directed by the SC or by any other enforcement agencies as provided under written law. With this, therefore, the risk of the platform operator misappropriating investment and repayment funds is well mitigated.
YES you are. Investors should be comforted that peer-to-peer financing platforms regulated by the SC are required to have a “living will” from the time the platform is launched to the public.
This concept of “living will” ensures that the integrity of all notes issued is continued in the event of platform failure. Fundaztic has appointed Rodgers Reidy as its back up service provider to execute this concept of “living will”.
Read more about Rodgers Reidy here
1) To diversify your investment portfolio with an investment product (Investment Notes) currently not widely available via traditional investment channels;
2) To generate an additional source of income via a fixed income investment;
3) To help Malaysian SMEs to grow their business and build a stronger economy;
Investors should implement a diversification strategy when building an investment portfolio.
*Diversification involves spreading your money across multiple investments in order to have investments that will sustain in adverse market conditions and mitigate losses. However, it will not lessen/eliminate all types of risk.
Fundaztic does not verify the financials provided as it is not a mandatory document required by the platform.
An “issuer” is a local SMEs or business which is seeking to raise funds online through our Fundaztic.com P2P financing platform. All Issuers would have complied with Fundaztic.com’s P2P financing credit criteria and have accepted the terms and conditions of the funding offer before their applications are listed. Detailed information with regards the “issuer” is available for “investors” to vet through and make an informed decision before deciding on their investment and investment amount towards the particular listing.
Fundaztic’s credit evaluation does not take these documents into account because our experience has shown that statistically, financial & bank statements are generally poor indicators of credit quality. Furthermore, our target segments are the smaller SMEs whereby the reliability, accuracy and timeliness of such financial records may also be questionable.
Individual – You can start investing with a minimum of RM50. All individual “investors” are encouraged to invest not more than RM50,000. If the “investor” decides to invest more than the mentioned amount, a confirmation on understanding the inherent risks involved will be required.
P2P Financing is an alternative investment vehicle and aims to provide a more transparent and diversified approach to investment opportunities. Each “investor” has access to investment opportunities with as little as RM50 towards the debt financing by SMEs in the country via the issuance of “investment notes”. With a low entry barrier, “investors” can also spread their investments across various investment notes therefore diversifying their portfolio. Finally, “investors” can easily track their investment performance online, anytime, anywhere.
As you are investing in one or more Issuer notes, you should expect to receive in return the amount you invested (principal) plus an interest amount (interest return). Principal + interest return is repaid per a pre-agreed repayment schedule in to your online account. However, repayments are not guaranteed by Fundaztic.com.
To improve our service offerings to Investors, guarantee and/or insurance mechanisms may be introduced as a part of Investors protection.
As part of Investors’ protection, all monies invested will be managed by an independent 3rd party Trustee. All investments made are channeled into the Trustee account and Fundaztic does not have rights of usage of these funds except for the intended purpose.
The reason behind this is due to the rounding adjustment to the nearest cent value. The rounding adjustments are done for the returns on the principal portion, interest portion and the platform fees portion. The amount may be rounded up or rounded down based on traditional mathematical rounding methodology for every investment made.
As P2P Financing involves multiple investors funding a single Note, the last investor of each Note will receive the balance of the rounding effect thus he/she may either receive slightly more or slightly less in term of total receivables.
YES. You will be given an option to either use your credit balance in your online account or make new payments when investing in new Investment notes. If you would like to use your credit balance in your online account to invest but the investment amount exceeds your credit balance, you will need to pay the remaining balance.
No, Issuers applications for funding will be listed on the platform for 10 days and issuers will be able to receive funds within the 10-day period only upon reaching 100% of the approved funding limit. To be considered successful, issuers are required to raise a minimum of 80% of the total requested funds within a 10-day period. Funds will only be disbursed to the issuer once it reaches the required 80% threshold. If issuers receive less than 80% within the 10-day period, the campaign is considered unsuccessful. Funds will then be refunded to the investors trust account.
After you have selected the notes to invest in, your investment will be locked-in for the duration of the funding period. At the end of the funding period, if funds raised is less than 80%, then, the funding is deemed unsuccessful and the amount you invested will be refunded automatically back to your trust account. You may choose to withdraw the amount once the credit has been performed. Repayments of successful funding are also channeled into your trust account and you may also choose to make withdrawals on these repayments. Withdrawals will attract standard online transactional charges.
No, once you have placed an investment into our P2P platform, you will not be able to modify/cancel/request for refund of the investment made unless the funding is deemed unsuccessful. Therefore, it is advisable for you to check carefully on all investments made before confirming payment.
Yes, charges as below:
• RM2.00 (Per transaction)
Withdrawal of funds from member’s Fundaztic account to member’s banking account.
• RM0.10 – RM1.00 (Per transaction)
Transaction charges (such as IBG, FPX) if any as charged by the banks
With this feature, investors have an option to allow our platform to perform auto-investments on behalf of them based on each investor’s investment criteria and conditions. The auto-investments will be deducted from investor’s available balance and the platform will not auto-invest if there is insufficient balance in the account.
Here are the step-by-step guides on how to activate and set your investment conditions.
First, you must first have a minimum of RM2,000 in your AVAILABLE BALANCE to set-up Smart-Invest.
1. Click “Smart Invest” on your homepage.
2. Next, click “Add Setting”.
3. Insert the amount that you wish to invest in the Notes.Next, choose your desired range for the Note’s Tenure, followed by the range of the Interest Rates you would like to receive and finally the Risk Grades.
4. Select “Active” and click “Submit”.
You can now view your Smart Investment conditions saved in your “Smart Invest” tab.
Terms & Conditions:
– You may setup up to a maximum of 5 active Smart Investments at any point of time.
– The platform will NOT auto-invest into any Notes that the Smart Invest system have already invested in or manually done so.
– When setting up the Smart Invest setting, please make sure your set the highest priority conditions that you want first followed by the 2nd and so on. This is because the system will take your first Smart Invest setting as your main priority and invest based on that condition first. if it doesn’t meet the first condition, only then it will invest based on the 2nd condition, etc. As the Smart Invest feature have invested based on your first condition, it will not invest in the same Note again even-though that same Note also meets your 2nd, 3rd, etc. conditions.
NOTE: You will not be able to edit/delete or make any amendments to your Smart Invest settings if your available balance is below RM2,000. However the Smart Invest system will still auto-invest on your behalf even if your available balance is below RM2,000 as long as it meets your settings criteria.
When Smart Invest kicks in, manual invest will be impacted, i.e. forced to stop. Manual invest will not be permissible until the spooling has completed. The reason being the system prioritizes committed investments over non-committed investments. This is so that the issuer will be able to achieve funding goals in the fastest possible manner.
It is a dynamic first-come-first served system. Dynamic in the sense that once an investment has been successfully been made under SI, the position of the member in the overall queue will change and the member will be re-queued for subsequent investments to be made. This is a fairer system for new members because regardless of when the SI was set up, each would stand a chance to be in front of the SI queue unlike the previous whereby position maintains as long as the settings have never been changed before.
Other platforms with SI or automated investment requires an upfront deposit before an investor can start investing. Fundaztic does not hence the need to put in the RM1000 to setup SI. Also, we do not want members to “game” the system and keep making changes to the parameters (from what we know, other platforms only allow 1 setting whereas we allow up to 5) and hence, why, RM1000 is also required to make any changes / edit settings already made. SI does not need RM1000 balance to run. It can and will run as long as there is sufficient balance to execute the settings / instructions made. Minimum investing under SI is RM50 per Note and maximum is RM5000 per Note.
NO. It is not necessary to do so. RM1000 is only required to setup and to make edits or changes. Let’s say your Smart Invest (SI) is activated and your setting says invest RM100 in all Notes. If you available balance is RM100, it will be able to help invest in just 1 Note for you. Even if available balance drop to 0 and it has to skip investing in a few Notes, when you receive enough monthly repayments and the available balance reaches RM100 again, then, the next available Note, SI, will invest for you also as long as the setting is activated.
The minimum is RM50 and maximum RM5000.
In your Fundaztic account’s homepage under “My Investments”, go to “Notes Funded” and you can filter accordingly to the following categories.
• Prompt Repayment
• Grace Period
• Fully Paid
However, if you do not have a Note which is in either of these categories then the category will not appear in the filter.
The recovery updates are sent on a monthly basis. Unless there are new Notes that has defaulted, then we will immediately email you the latest update on the new defaulted Notes.
With regards to Late Notes, we do not provide any update as during this time, the only actions done are through internal collections i.e. Phone Calls/Emails/SMS/ etc. However, as of when we found out that the Late note has already ceased business operation, we will inform you via email immediately. We will also escalate and proceed with legal and 3rd party action earlier.
If not, we will only proceed to 3rd party recovery actions upon the Note turning default.
A note is classified as LATE after 7 days from the payment due date. Currently, all issuers will be given a 7-day grace period from due date to make their monthly repayments. Once the issuer has exceeded the 7-day grace period, the Note will be classified as LATE. The grace period may be changed by Fundaztic depending on suitability.
Once a payment is classified as LATE, a late penalty fee will be charged to the issuer. All our fees and charges for issuers can be viewed here.
A Note will be classified as DEFAULT after being LATE for 3 consecutive months (91 days past due). E.g. Note A’s payment due date is on 1st January. If the Issuer of Note A has still not make any payments by the 1st of April, the Note will then be classified as DEFAULT.
Debts are not extinguished when a debtor passes away. The debt must be paid from any assets in the estate of the deceased before distribution is made to the beneficiaries. Peoplender will commence legal action against the estate of the deceased to recover the amount owed under the funding contract and will also lodge a caveat with the court to prevent distribution of assets without repayment of debts being made first.
This policy allows for the defaults that are at advanced stages of legal proceedings and are unlikely to be recovered in full to be written-off or classified as bad debts so that the amount can be considered losses incurred. As such, in accounting and statutory declarations (taxes as an example) the amount that is written-off or classified as bad debts can be deducted from the earnings made for the period of accounting or declaration. It allows for the proper closing of books rather than leave it opened or rather “hanging” indefinitely.
Classification is time based i.e. after 180 days of being in the default, it would be classified as bad and will be reflected in the members homepage under MY INVESTMENTS, “WRITE-OFFS/RESTRUCTURED”
NO. Legal actions where viable and permissible will go on.
Negotiations for repayments where the issuers are still contactable and willing to cooperate will continue as a part of the recovery process.
The policy is put in place to allow for better management of accounting, not to put an end to actions that are being taken or can still be taken.
YES. There are such possibilities because despite being written-off / classified as bad, the platform would still continue on recovery procedures and there may also be instance of “selling-off” the bad portfolio to interested third parties as part of the overall recovery strategy.
It will be reflected in your homepage, under MY INVESTMENTS, “Paid Recovery”
You will be able to see it in a separate line at the bottom of your homepage (desktop version) and under MY INVESTMENTS, “Write-off/Restructured” tab (both desktop version and mobile apps)
You may filter interest earned for the period and then filter the written-off amount for the same period and finally filter the paid recovery for the same period. You may export all three. Then, take the interest earned minus written-off amount and add-in the paid recovery amount for actual interest earned in the year.
If a default happens, Fundaztic will bear the “first costs of recovery”. This mean that if recovery is not successful, the cost is absorbed by Fundaztic. However, if successful in any recovery, then, the costs of recovery will firstly be deducted from the recovered amount. If there are any balance, then, it will be used to offset the repayment fees due and the remaining will be distributed back to the investors based on the proportion of their investment.
All our fees and charges for investors can be viewed here.
Yes, Fundaztic has the full authority on behalf of our investors to pursue recovery actions from defaulted Issuers through suitable actions permissible by the laws including suit towards bankruptcy.
Yes, Fundaztic reports all our issuer’s repayment status to all THREE credit bureaus in Malaysia. I.e. Credit Bureau Malaysia, CTOS and RAMCI.
YES. Early settlements are allowed with no penalties.
Should the Issuer wish to repay a Funding early and end the Funding Contract, they may do so, but they must repay the entire Funding Amount. The Issuer can do so by giving Peoplender Sdn. Bhd. a notice in writing fifteen (15) Business Days prior and repaying the full Funding Amount that the Issuer owes to the Investors under the Funding Contracts in respect of the Funding. Peoplender Sdn Bhd shall grant the issuer a rebate on interest upon such early repayment based on the formula below: –
X = Remaining funding tenure (months)
Y = Funding tenure (months)
Total Interest = Funding Amount x Interest rate x tenure (months)/12
The system performs adjustments in the rare events where there are clashes in transactions done by different parties at the exact same moment resulting in one of the transactions not being recorded momentarily. The system will in batches comb through all transactions and if such is discovered, “debit adjustment” will be made.
Effective 20/6/19, the Investor’s Trust account will be interest bearing at 2% per annum subject to end of the day daily balance being a minimum of RM3million. However, this is treated as “indirect fee” paid by investors with any balance in the account should the requirements for earning interest on the particular day be met. Any interest earned from this account will not be distributed back to the investors due to the amount being extremely small and the complexity of management in the distribution. Therefore, all investors who do not wish to contribute to the “indirect fee” can have an option to just withdraw any available balance any time they wish to.
“Indirect fee” is the term used for the interest earned on daily balances of a minimum of RM3million in the Investor’s Trust account. It is named such because indirectly, any investors, by having any available balance in the Trust account, which cumulatively with other investors’ monies, lead to the end of the day balance being RM3million would have paid some monies to the platform as any interest earned in the account will not be distributed. Investors need not do anything nor are they charged at any point in time for this fee. The fee is resultant from their available balances in the Trust account subject to conditions of such interest payment being met. If the condition of minimum daily balance is not met, then, interest is not earned and therefore, there is no “indirect fee” involved.
All investors have an option to opt-out of have to be party to the “indirect fee” through the withdrawal function. Investors can click the withdraw button at any time they wish so that there is no available balance in their account and therefore, would not be party to the pool on balance in the Trust account which yields the interest or the “indirect fee”. However, this may complicate the ability to perform Smart invest as well as re-investments.
Effective 20/6/19, the Investor’s Trust account will be interest bearing at 2% per annum subject to end of the day daily balance being a minimum of RM3million. However, this is treated as “indirect fees” paid by investors with any balance in the account should the requirements for earning interest on the particular day be met. Any interest earned from this account will not be distributed back to the investors due to the amount being extremely small and the complexity of management in the distribution. Therefore, all investors who do not wish to contribute to the “indirect fees” can have an option to just withdraw any available balance anytime they wish.
No, only Notes that you have invested in effective from 1st February 2020 will be applicable to the new platform fees. Any Notes that you have invested prior to 1st February 2020 will still remain at the rate of 1% of monthly repayments.
The CTOS SME Score is a unique credit risk assessment tool that provides Fundaztic extending trade credit information with an effective rank ordering system of credit risk for small and medium-sized enterprises (SME).
This scoring model gives Fundaztic the power to make consistent, objective risk decisions as they assess the credit worthiness of the businesses and owners to which they extend credit, including loans, leases and trade credit.
For more information please click on the following link:
1) The CTOS SME score has a higher GINI Coefficient score compared to other credit models in the market. The GINI Coefficient evaluates the prediction power of the model, which means that the CTOS SME Scorecard has a higher level of predictive accuracy in sieving out between Good and Bad customers.
2) The CTOS SME Score Model is comparatively updated within the market and the model conducts regular calibration in order to stay relevant to the industry. CTOS will also take steps to adapt to any internal and external changes accordingly to ensure consistent and optimal model-based decisions are being made.
3) CTOS SME Score Model uses a Dual Score Methodology which is designed specifically to cater for both Company (Sdn Bhd) and Business (Partnership/Sole Prop) Entities. Companies and Businesses behave differently, hence their respective score model have different key characteristics.
Dual Score Methodology caters for both Company (Sdn Bhd) and Business (Partnership/Sole Prop) Entities. Companies and Businesses behave differently, hence their respective score model have different key characteristics. Below are the differences in key characteristics for both Company and Business:-