MONAS

H
BUSINE
SS

Lecture 1: Part 2
FINTECH

BFW 3841 Credit Analysis and Management

Tee Chwee Ming

Accredited by: Advanced

Signatory:
 FINTECH
• Financial technology which encompasses a
new wave of companies changing the way
people pay, send money, borrow, lend and
invest.
• Disruptive technology
• Fintech lending marketplaces holds the
highest transformative potential for those
excluded from the conventional banking
system. BFW3841 S1 2020

2
 FINTECH AND LENDING
• Conventional bank face increasing capital,
regulatory constraints, fees and penalties,
the cost of lending
• With fintech lending cost of moving funds
should be lower.

BFW3841 S1 2020

3
CROWDFUNDING
• Small amounts of funds, obtained from a
large number of individuals or organizations,
to fund a project, a business or personal loan,
and other needs through an online web-
based platform’

BFW3841 S1 2020
4
CROWDFUNDING
• Crowdfunding can be divided into the
following:
• Do not provide a financial return (donation‐
based or reward‐based models, such as
kickstarter).
• Those whose goal is to provide a financial
return

BFW3841 S1 2020
5
P2P LENDING
 Peer-to-peer (P2P) lending is a form of
extending small loans that enables
individuals to borrow and lend money without
the use of a bank as an intermediary. Peer-
to-peer lending removes the middleman
bank from the process by leveraging on
financial technology.
 Technology is the essence!

BFW3841 S1 2020
6
P2P LENDING
 Benefits of P2P lending to creditors:
(a)Potentially high return
(b) Easy to start with small initial investment
(c)A stable source of income: Interest
 Benefits of P2P lending to borrowers:
(a)Access to new sources of financing to
SMEs
(b)Lower cost of funding
(c)Efficiency in loan origination process

BFW3841 S1 2020
7
MALAYSIAN P2P (TOP 6)
 ALIXCO
 B2B FINPAL
 FUNDING SOCIETIES
 FUNDAZTIC
 NUSA KAPITAL
 QUICKASH
 BASIC REQUIREMENTS:
https://
www.gobear.com/my/blog/6-p2p-lending-player
s-leading-the-way-forward-in-malaysia
BFW3841 S1 2020
8
International P2P lending sites
https://www.globalp2plending.com/en/blog/entry/pe
er-to-peer-lending-for-international-investors
/
Value of global P2P lending
https://www.cnbc.com/2020/07/21/ali
baba-ant-group-ipo-hong-kong-shangha
i-explained.html
FACTORS WHICH SUPPORT
CROWDFUNDING ECOSYSTEM

• Infrastructure to be fully integrated and

seamless (5G) and cloud computing
• Robust cyber-security: Ransomware
• Support from the government in terms of
licensing, regulations, tax-breaks,
economic and political stability

BFW3841 S1 2020

12
FACTORS WHICH SUPPORT
CROWDFUNDING ECOSYSTEM

• Social media e.g. Facebook, Twitter and

Instagram
• The role of proper financial education at
school and tertiary level

BFW3841 S1 2020

13
CROWDFUNDING ECOSYSTEM – PARTICIPANTS AND
RESPONSIBILITIES

BFW3841 S1 2020
14
REGULATOR: SC
 Enforce and administer securities laws
and govern the securities industries in
the area of regulated crowdfunding.
 Regulate which investors and issuers
can participate, how portal operators
conduct business, and report back to
the Securities Commission.

BFW3841 S1 2020
15
TYPES OF
INVESTORS/CREDITORS
 Accredited Investors or Creditors (AI) or
(AC)
 Deemed by the Securities
Commissions to be high net worth
individuals or investment firms who
would not be impacted financially if the
regulated crowdfunding firm failed.
 Knowledgeable and can decide on
their investments.

BFW3841 S1 2020
16
TYPES OF
INVESTORS/CREDITORS
 Non-Accredited Investors (NAI).
 Early‐stage investors seeking
investment opportunities.
 This type of investors need to be of
legal age. (> 18 years of age).
 Limited funds
 Unsophisticated investors.

BFW3841 S1 2020
17
BROKERS/DEALER
 Crowd-funding portal (platform) owner
 Company vetting is done by brokers
 Conduct due diligence make too
ensure it meets all regulatory
requirements.
 Additional information may be
required

BFW3841 S1 2020
18
BROKERS/DEALER
 Anti‐money laundering due diligence on
borrower and investors/creditors
 Check the suitability on investments for
investors
 Registered with Securities Commissions

BFW3841 S1 2020
19
ISSUER

 Issuers issue shares or debt instruments

 Direct contact between creditors/investors
and issuer
 Crowdfunding brings new sources of
financing.
 The issuers must be transparent and
report their current utilization of the raised
funds every year
 Issuer pays interest to creditors of the
debt instruments
BFW3841 S1 2020
. 20
THIRD PARTY SERVICE
PROVIDERS (TPSP)
 Lawyers, accountants, auditors, technology
and service providers, production
companies, social media, marketing
professionals etc.
 TPSP to ensure all regulatory and legal
requirements are met.
 Technology service providers facilitate
the entire process from pre-during-post
transactions are transparent and non-
repudiation (Cyber-security)
BFW3841 S1 2020

21
Websites
https://www.bloomberg.com/asia
https://www.cnbc.com/world/?re
gion=world
 MONASH
BUSINES
S

[select this box and click

‘delete’ to remove]
To change this image:
1. Click the ‘view’ tab and
then ‘slide master’
2. Locate the slide in the
slide master gallery
3. Select the image, right
click and select ‘format
picture’
4. Under the ‘fill and line’
tab, select ‘file’ and
navigate in your
browser to the
preferred image
5. Under ‘format shape’,
ensure the ‘tile picture
as texture’ box is
checked
6. You can then position
the image using the
‘alignment’ dropdown.
Images can be scaled
THANK YOU

FIND OUT MORE AT MONASH.EDU.MY

LIKE @MONASH UNIVERSITY MALAYSIA ON FACEBOOK
FOLLOW @MONASHMALAYSIA ON TWITTER