Defaults
At the time of writing, the default rate on our platform is zero. However, this is subject to changes. Keep up-to-date information by frequently visiting our Statistics page.
Default is defined as the “inability to meet the contractual payment terms”.
It is classified as non-performing when the principal or profit is due and unpaid for a period of 90 days or more
Capsphere team will provide updates accordingly via platform (Note Updates).
Please note that our team performs close monitoring to the payment schedules of our Issuers. Should an Issuer not be able to fulfil its payment obligations, Capsphere support team will reach out to inform Investors as soon as possible. Rest assured, we take proactive measures to keep you updated.
While defaults are a part of the P2P financing space, the Capsphere team does its best attempt to lower the probability of default by:-
- Performing initial screenings during the application stage.
- Constant monitoring of Issuer’s repayments.
- Considering rescheduling/restructuring of the payment terms to Issuers that have delayed repayments.
- Ensuring each Investment Note is secured with an asset.
Even with these preventive measures in place, we cannot guarantee a risk free investing environment. However, the risk of defaulting should not discourage you from potential gain in the future. Additionally, best practices such as diversifying your portfolio should be adhered to when investing.
In such an event, the following proactive measures are taken:-
Days Overdue
Recovery Steps
1 day
Recovery team will remind the Issuer on the overdue payment.
30 days or more
- Follow-up reminders together with a letter of demand.
- Discussion(s) to understand the business situation and expected payment timeline.
- Where applicable, recovery specialists will be engaged to assist in the recovery process.
60 days or more
- Follow-up reminders together with a letter of demand.
- Where applicable, an Investment Note may be restructured with enhanced monitoring by our team.
90 days and above
- The Issuer will be reported as a defaulter to the credit reporting agencies.
- Where applicable, legal action will be taken in efforts to recoup a just and fair portion for Investors.
In the event of a default, Capsphere will seek legal advice and assess the situation whether to pursue legal action on the Issuer. Additionally, with the help of a recovery specialist, Capsphere will work towards claiming a fair and justifiable amount for Investors.
As each case is unique, we cannot commit to a specific time frame as to when Investors can receive their claim. However, we assure you that our Capsphere support team will be available should you have any questions.
Not all default cases are created equal. We have devised two different categories for Issuers who have defaulted.
Recovery process – State in which Capsphere and its partners are actively in communication with the Issuer and is currently undergoing legal processes for a chance to possibly recover the debt (partially or fully).
Low/no recovery process – State in which Capsphere and its partners are no/not pursuing further recovery efforts due to:-
- Company and/or guarantors declared bankrupt.
- Company has ceased its operations.