Investor's FAQ

General

What is P2P financing, and why should I invest​?


Peer-to-peer financing, or P2P financing, is the practice of financing money to businesses through an online platform that matches those seeking financing with Investors.​​​ It offers a simple and transparent way to manage your funds, by accessing it through an online platform anytime. It is a great alternative for small and medium enterprises (SMEs) looking to raise funds for their business operations, and for Investors that are looking to diversify their portfolios.




What do the terms "Investor", "Issuer" and "Investment Note" mean?


Investor: a party who is providing funding
Issuer: The company that is raising finance.
Investment note: a financial instrument (similar to a loan) that is being facilitated between Issuer and Investor.




How does Capsphere work?


Check out this video that explains how Capsphere works:

  • Capsphere provides financing to small medium enterprises/businesses by connecting them with investors through our online platform.
  • As the first P2P financing platform in Malaysia to adapt an asset-based approach, we provide businesses with capital to purchase assets whereas they provide collateral to Capsphere so that it acts as a protection layer for investors in case anything bad happens.
  • This way, not only issuers are able to continue funding their businesses, investors can also get enhanced returns with added security. A win-win situation!




Is P2P financing safe?


As with any investment, there are risks associated with P2P financing.
These risks arise when Issuers are unable to fulfill their financial obligations and defaults on the Investment Note, due to internal or external factors. To minimise these risks, Capsphere uses the following methods:​​

  • Robust screening and credit assessment processes to ensure quality of Issuers listing Investment Notes on the platform.
  • Collateralising Investment Notes, such that if the Issuer default, some of the outstanding amount can be recovered through acquiring and re-selling the asset(s).
  • For instance, Syarikat ABC has a remaining outstanding of RM 25,000 that defaulted while the current collateral value is RM 15,000 (before recovery fees). Hence, we are able to off-set the defaulted Investment Note by selling the asset to recover a portion of the Investment Note.
  • Rigorous monitoring processes to identify Issuers that are at-risk of defaulting after an Investment Note has been issued, and to take any necessary precautions to prevent a default from occurring.
We encourage Investors to diversify their investment across multiple Investment Notes to diversify their risk and exposure.




How is Capsphere different from other platforms? What is the asset financing?


We are the first P2P financing platform in Malaysia to offer asset-based financing. We help SMEs raise financing to purchase/refinance assets (e.g., machinery, equipment) for the purpose of growing their business. Investment Note is secured by the SME's asset, which provides a security to Investors.





Product

What is the minimum investment?


The minimum deposit amount to open an Investor account at Capsphere is RM 200. The minimum investment for each Investment Note starts at RM 50.

  • We have two types of account:
    • Basic - Subscribe up to only RM 10,000 per note and up to RM 100,000 total investment.
    • Premium - For investments above RM 100,000.
  • You can refer to the step-by-step guide on how to top up and withdraw here.




Is Capsphere offering any Syariah compliant products?


We are currently not offering any Syariah compliant products, however we hope to provide this in the future!

Meanwhile, do follow our social media accounts so that you'll get the latest updates.




What is the process like? Can you give an example?


Our platform matches companies looking for financing with Investors seeking high returns and diversification. Let's go through an example:

  • Adam, the owner of Syarikat ABC, needs RM 100,000 to buy machines for a new factory.
  • Adam (the Issuer) registers for a Capsphere account and requests RM 100,000 (the Investment Note) to purchase the assets. Once approved (within 14 days), the funding request is made public to Investors on our platform for up to 28 days. ​
  • Ali, Muthu, and Ah Tan want to diversify their investment portfolios and sign up as Investors on Capsphere. All three of them can start investing from as low as RM 50. They see the funding request from Syarikat ABC for RM 100,000, to purchase machinery, listed at 8% interest for a period of 2 years.
  • They learn more about the company from the fact sheet attached to the request. If they are interested, they click 'Subscribe' (invest) and enter an investment amount. ​
  • Once Syarikat ABC raises at least 80% of the intended amount (RM ​80,000), the subscription/fund-raising is deemed successful and the funds will be released within 14 days.
  • Syarikat ABC pays monthly instalments to the Investors ​for 2 years with an interest rate of 8%.
​It is as simple as that!





Investment Return, Fees, Withdrawal and Repayment

What returns will Investors get if we invest in Capsphere?


The expected returns to Investors is above 6% p.a.. This return will vary with each Investment Note. When considering and investment, you can view all the details of the Investment Notes in the fact sheet, including:

  • Risk rating of the expected returns
  • Total funding amount
  • Tenure and security for the Investment Note




​What fees do you charge Investors?


There are no upfront fees for Investors. Capsphere takes a 1% to 2% service fee from the repayments of Investment Notes when they are repaid by the Issuer. (The exact charge will depend on the size and tenure of the Investment Note.) Investor service fees are deducted from Issuer repayments, hence there are no requirements for Investors to actively make any payments for such fees. If the Issuer is unable to continue to repay their Investment Notes, Investors will not be charged a service fee on the remaining uncollected amount of the loan. Investors will be subjected to third party charges, such as processing fees, legal charges, and taxes. The list of applicable fees and charges are as below: ​

  • Investor Service Fee: Up to 2% of monthly repayments
  • Processing Fees:
    1. FPX at RM 1 per transaction
    2. Local Credit Card at 1.5% SST (if any) : 6%
  • Legal/Recovery Fees: Based on quotes given by providers.
These fees will be shared by all Investors (weighted by the amount invested by Investor). Capsphere will endeavor to recover all legal/recovery fees from the relevant Issuer. In the event where fees are recovered, these fees will be reimbursed to Investors. No interest is generated from deposits.




When can Investors withdraw their money? Are there any fees or charges for withdrawals?


You can withdraw any balance in your account at any time. While some tenures of Investment Notes on our platform may be up to 3 years, your funds are not locked in for the whole tenure period. You may withdraw your money when Issuers make repayments back into your account. This will be reflected in your account balance. Withdrawals will then take 2 to 3 days to be processed and received into your bank accounts. No fees will be charged for withdrawals. However, there may be a transaction fee to process the transaction or to wire the withdrawal amount to your dedicated bank account. ​




How will I receive the repayments from my investments?


​Issuers are requested to make repayments on a monthly basis, 1 calendar month from the date in which the disbursement of funds is made for the Investment Note.
When Issuers make repayments, Capsphere will debit the relevant Investors' accounts that have subscribed/funded the Investment Note. This amount will be pro-rated based on the investment contributions made by each Investor.
Investors may withdraw any available funds in their accounts at any time. Withdrawals will take 2 to 3 days to be processed and received into your bank accounts.




What happens when there is a late payment? Will I get compensated for the delay?


We have a very rigorous policy for monitoring monthly repayments. Our systems will flag repayments that are paid late, which will mobilise our team to take action to resolve the issue.
Once there is a late repayment flag, we will liaise with the Issuer to ensure that the late repayment is paid back into the account within 7 days, otherwise a late repayment charge will be incurred.
We pay special attention to recurring late repayments through our special monitoring procedure.
The late repayment charge is calculated based on the number of days late, and some part of it will be credited to Investors as part of compensation for the delay. More information on late repayment charges can be found in our Terms & Conditions.​ ​





Issuer Evaluation

How do you assess the credit worthiness of companies?


We will assess each Issuer using our proprietary credit assessment tool, specifically purposed for assessing SME credit.​ At the time of application, Issuers are asked to submit key information on their company; these include:

  • Financial statements
  • Bank statements
  • Information on the management team
  • Their business model.
Capsphere’s credit model provides an assessment of the health of the business and takes into account both the financial and business risk pertaining to the issuance of the Investment Note. In addition, we will also rely on credit bureaus to provide information on the Issuer's creditworthiness and previous behaviours (e.g. delinquencies). Based on our assessment of the issuer's financials, management, operations, and collateral, each issuer is categorised into a range of risk classes ranging from A (low credit risk profile) to F (high credit risk profile). These risk profiles are published on the factsheet to ensure transparency to investors of the risk levels of each issuer. ​ Throughout the period of the note, we closely monitor changes to the Issuer’s financial and business risks, and repayment behaviours to ensure that our risk classifications are up-to-date.




What happens if the Issuer defaults? How do you liquidate the asset when this happens?


As soon as a problem with repayments has been identified, we will take every effort to get Issuers back on track. For example, through restructuring their Investment Note in circumstances where this is required. However, in some instances there will be defaults. Given that the Investment Note is asset-backed, we can seize (take ownership of) the asset financed and resell the asset in secondary markets. We have a network of resellers/secondary market platforms that we will partner with to resell the assets that are used as collateral on our platform. Once we get the proceeds from reselling the assets, we will repay Investors. Each investor is repaid based on the pro-rated amount invested in the Investment Note.




Why are the Investment Notes collateralised?


Investment Notes are collateralised to provide additional protection to Investors, therefore providing greater assurance.




How do you handle non-performing notes?


We will start by continuously contacting the Issuer to discuss any alternative methods to recover the outstanding amount. If the Issuer fails to comply, we will classify their Investment Note as default and take legal action against the Issuer.




How will Capsphere liquidate the asset?


We leverage on our management team’s and directors’ vast experience, contacts, and expertise in various fields to liquidate an asset. We will tap into multiple avenues, such as:

  • Online platforms
  • Second hand dealers
  • Contacts within the industry
to ensure that we transact at the most efficient price in the market. We will also engage a third-party recovery firm to assist us with the process.