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Funding Societies Malaysia Review After 6.5 Years and RM11k Invested

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This is my long overdue Funding Societies Malaysia review, after being a user for 6.5 years (as of writing time).

Yes, 6.5 years. In March 2017, I deposited RM1,000 into my Funding Societies account. I was happy with the performance so in the following year, I deposited RM10,000 more (RM3,000 + RM7,000). So in total, I put RM11,000 of my own money in there.

Obligatory referral link: If you deposit a minimum of RM1,000 within 60 days of account opening, you (and I both) will get an extra RM30. Simply click and register through this Funding Societies Malaysia link.

This article will compile what I liked about Funding Societies Malaysia, what I don’t like, and yes my investment performance as well.

Use this to make an informed choice if you want to explore P2P financing as an investment, but don’t take this as investment advice please. I’m simply sharing my experience 🙂

How does P2P financing investment work?

In case you are new with the concept of P2P financing as an investment, it’s basically you lending money to businesses and them promising to return it back to you plus interest. That interest your profit.

If this sounds like business loans from banks, then you have the right idea. Yes, P2P financing is something like a business loan, except the financing is not from banks, but from retail investors like yourself.

Right off the bat: What’s My ROI with Funding Societies Malaysia?

Because when it comes to investments, most people are interested in the ROI first 🙂

You have perhaps heard how P2P financing can give double-digit returns. On Funding Societies Malaysia website, they put ‘up to 14%’ return rate per annum.

Other P2P financing platforms have even put up to 18% return rate. As far as investments go, you have to agree this ROI is definitely on the higher side.

Well, that’s the ROI they claim. How true is that?

I’m sure others have their results, but here is my Funding Society portfolio snapshot. After investing in P2P financing for 6.5 years, my annualised portfolio performance is 6.60%.

Despite the defaults and lower-than-expected ROI (I expected at least 8% and above), I’d say investing in P2P financing was worthwhile for me. Honestly 6.60% isn’t a bad figure, considering the pandemic and everything.

Aside from the annualised portfolio performance, other important data from my Funding Societies Malaysia snapshot includes these facts:

  • I have made 239 investments in total (see General P2P financing strategy section below)
  • I have RM3,812.94 worth of outstanding principal, which is ‘locked’ in 6 ongoing investments
  • After 6.5 years, I have accumulated RM3,404.05 in defaults, mostly low to no recovery. I am not likely to see that money again

Note: Worth noting that my Funding Societies ROI before the pandemic was actually much higher. Back in 2019 (after 2 years investing), my returns were 12.52%. In 2020 (after 3 years investing), my ROI was even 2x% even with some defaults!

So maybe the ‘low’ 6.60% was just due to pandemic? Who knows. But at least you get to see 3 years and 6 years time frame (at least from one person).

Speaking of strategy, this is the strategy I used to invest in P2P financing.

My General P2P financing strategy

With P2P financing, my strategy is to lend SMALL amounts to MANY businesses, rather than lending a BIG amount to A FEW companies.

The way I see it, this is the equivalent to investing in unit trust/mutual fund (which contains various stocks and other equities) rather than investing in a few company only. I have minimal knowledge in the companies nor the ins and outs of different industries, so this is how I reduce risk.

(I’m not saying this is the best strategy. This is MY strategy, as someone who is admittedly lazy to research each and every company before investing)

That brings me to the next section, features in Funding Societies Malaysia which allowed me to do this strategy in the first place.

Funding Societies Malaysia review: What I Like

#1 – Easy to automate through the auto-invest feature

In my Funding Societies Malaysia snapshot above, I mentioned how I have made 239 investments. You think I read every single company? Nooooo. I enabled the auto-invest feature instead.

By enabling the auto-invest feature, I could effectively get the bot to make small investments in various companies every day without me even logging in. If enabled, your activity section will look like so:

Before you ask, yes you can tweak the auto-invest settings. You can:

  • exclude certain industries,
  • select only Islamic Investment notes,
  • set desired return rates,
  • set loan tenure, and
  • decide on investment amount range (I set mine from RM100-RM1000)

The auto-invest feature is important to me because P2P financing opportunies tend to be fully-funded VERY VERY FAST. Without it, I doubt I could even invest in tens of companies, let alone hundreds.

#2 – Availability of Shariah-compliant options

Funding Societies didn’t used to offer Shariah-compliant options. They only started offering Islamic Investment notes in mid-2022.

You can quickly identify the Shariah-compliant options – simply look for the green moon-and-star symbols in the Investment Opportunities section.

Funding Societies Malaysia review: What I Don’t Like

#1 – Not liquid

I can’t emphasise this enough. If you do P2P financing as an investment, you cannot cash out your investment whenever you want. Once you have lent the money, you HAVE to wait for the businesses to make repayments because you can cash out.

Depending on the financing you choose to invest in, the tenure could end in 30 days or 18 months. I don’t know about other platforms, but Funding Societies will show upcoming payments like so:

Take note that the upcoming payments are not guaranteed. If the companies you lent to defaults and could not make repayment, then you won’t get the money. That’s the risk part that comes with P2P financing as an investment, that you have to accept.

If this sounds too risky to youy and you want liquid investments/savings options that are also safe, then check out my 6 Best Savings Accounts in Malaysia to Put Your Emergency Funds article. It is absolutely fine to skip P2P financing if you want to be able to access your money at all times.

#2 – Less options for Shariah-compliance

Funding Societies Malaysia offers 4 types of financing for businesses, for retail investors like you and me. They are:

  • Business Term Financing
  • Accounts Receivable Financing
  • Accounts Payable Financing
  • Guaranteed Investment Note

(Funding Societies Malaysia actually have more financing options. To learn more, and the differences between them, please refer to their Investment Type FAQ)

However, as far as I understand, only Guaranteed Investment Note is Shariah-compliant. And as far as I can tell, the ROI for Guaranteed Investment Note in Funding Societies is ‘only’ 6%. (If I’m wrong here, let me know)

I mean, it’s good to have any option at all, but it’s a con nonetheless.

Other P2P financing platforms in Malaysia

Funding Societies Malaysia is NOT the only P2P financing platforms in Malaysia. As of writing time, Securities Commission Malaysia have issued lisences to 12 peer-to-peer financing platforms in Malaysia.

I know some of the other P2P financing platforms are Shariah-compliant, but I am not sure which ones (if any) aside from Funding Societies have BOTH the auto-invest and Shariah-compliant features. If you know, please share in the comments!

Thus concludes my Funding Society Malaysia review. To be completely transparent, I haven’t actively invested since 2020 – but only because my investment portfolio is already too risky (I am heavy into crypto – NFA!!) and I wanted to rebalance it. But I’m happy I tried it out, and got a positive experience overall.

Funding Society Malaysia referral code and bonus

Obligatory referral link: If you deposit a minimum of RM1,000 within 60 days of account opening, you (and I both) will get an extra RM30. Free money is free money. Simply click and register through this Funding Societies Malaysia link.


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7 Comments

  1. Very insighful articel.I found out that capbay lower risk of default, Maybe can consider compare to funding society. But minimum 10k.

  2. Started both Funding Societies & Fundaztic People dear Sdn Bhd by in 2018, last deposit in 2019.

    Funding Societies Annualised Return is at 8.14%.
    Fundaztic Average ROI was at 29.19%.

    I find Fundaztic do better filtering and lessor default cases too. It could be luck.

    I’ve gotten both my capital back (intentionally withdraw profits regularly since pandemic, LOL). Now I just let the remaining cash do it’s work, but won’t park more money in. 🙏🏼😊

  3. (there were typos in the earlier comment)

    Started both Funding Societies & Fundaztic by Peoplender Sdn Bhd in 2018, last deposit in 2019.

    Funding Societies Annualised Return is at 8.14%.
    Fundaztic Average ROI was at 29.19%.

    I find Fundaztic do better filtering and lessor default cases too. It could be luck.

    I’ve gotten both my capital back (intentionally withdraw profits regularly since pandemic, LOL). Now I just let the remaining cash do it’s work, but won’t park more money in. 🙏🏼😊

  4. Really terrible returns. I’ve been investing in CapBay for more than 3 years and my annualized returns are 8+% or 9+% after defaults which are far and very few. I’m a very happy CapBay customer and will recommend it to others despite the lower returns as their default rate is very low (1% for me).

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