In our previous article, we covered the benefits and how PeerPower works for the borrowers. Now Let’s continue on the investors.
Benefits to P2P Lending Investors
1. Attractive yield – Through PeerPower platform, P2P lenders can achieve return up to 8-15% p.a.
2. Monthly Cash Flow – P2P lending has a unique feature from every financial products in the market. Lenders will receive cash inflow as their returns every month through regularly scheduled interest and principal repayments.
While for bonds you have to wait until the maturity to receive your principle back, for P2P Lending, investors get their principle back since the first month together with the interest.
3. An Alternative Investment Channel – Investors can diversify their portfolio with a unique investment product in terms of monthly returns and low volatility.
4. Portfolio Diversification – Through PeerPower platform, investors can start lending as little as 1000 baht per loan and diversify their investment in as many loan as they want. There are up to 10 different risk levels of loans available for investors to select depending on the risk appetite. A well-diversified portfolio will give profitable returns and minimizes impact default risk.
How does the P2P lending platform work for Investors?
Create Account & Document Verification
First, P2P lenders start by creating an account and fill in the personal details. They will pass through KYC process and need to take a short Suitability Test, after which they submit a set of documents to verify identity and activate an investor account.
Regarding BOT requirement, retail investors are limited to a total investment of 500,000 THB per year, while there is no investment limit for High Net Worth or Institutional investors.
Loan Funding on the marketplace
After your account is activated, you will be able to browse on Loan Listing where the borrowers’ information are displayed to help you to make investment decisions. This information include both current profile and credit history of the borrowers, for example, monthly income, debt to income ratio, number of loans outstanding. The more conservative investors would lend to the low grade borrowers (grade A, B) and on the other hand, aggressive investors will lend to higher grade borrowers (grade C, D). When the loans are 100% funded, the money will be disbursed to the borrowers.
Receive Monthly Returns
On the monthly scheduled due date, the borrowers will then have to make repayments which will be fractionalized to repay to the investors’ accounts and are available for re-investment or withdrawal.