Who can apply to become a lender with Crowd-genie?
Anyone from all around the world (either an individual or a corporate), as long as the due diligence KYC/AML check is cleared, and who is qualified as Accredited Investor can become a lender on the platform.
In Singapore, Accredited Investor is defined as an individual with
(i) NET Personal assets exceeding SGD 2 million (or equivalent in foreign currency) or,
(ii) Income in preceding 12 months of not less than SGD 300,000 (or equivalent in foreign currency).
Who can register as an Individual Investor member?
You can register as an Individual Investor member if you:
- Are 18 years old or above
- Are an Accredited Investor
What are the required documents for an individual investor?
- Proof of residential address, dated within the last six months
- A single-name (strictly same beneficial owner only) bank account with a local bank or foreign bank
- Proof of Identity: NRIC for Singapore Citizens; and Passport/Employment Pass/Dependant’s Pass/Student Pass for Foreigners without PR Status
Who can register as a Corporate Investor member?
A Singapore-registered body corporate with ACRA. Currently we do not admit charities and religious organizations.
What are the required documents for a corporate investor?
- Certified true copy of the latest ACRA Bizfile Business Profile Report
- Certified true copy of the Limited Liability Partnership Agreement/Memorandum & Articles of Association (M&A)
- Proof of Identity of Directors/Partners/Managing Partner
- Proof of residential address of all the authorized Directors/Partners/Managing Partner in the Resolution
- Proof of local trading address, dated within the last six months
- A corporate bank account with a local bank or Foreign Qualifying Full Bank in Singapore
Can I open more than one account?
Yes, you can open multiple accounts, but you need to use different e-mail addresses. Some people might want to be investors in their personal capacity, while still borrow funds for their own company(s). To do this, you will need to register as two different entities, that is you would need different e-mail addresses, NRIC (for individuals) or UEN (for companies).
Can investors remain anonymous?
During registration, you will establish your unique display name.
The display name will be the only name that is shared with other investors. When there is a successful match and you are an allocated investor in the contract with the borrower, for legal purposes, your real name will be included as a key term on the final contract note. No other investors will be able to see your real name or details, and note contracts are not disclosed other than to an borrower unless required by law or regulation.
How much does it cost? What are the fees?
There is no processing charge for investors or borrowers during application. We charge you a 3% to 8% service fee when you receive a repayment from the borrower. It is deducted from the escrow agency account. If the borrower does not make a repayment, we do not get any fee.
How does the registration and funding process works?
The process is following:
- You register a user account with us and create a profile on the platform. (Note: only successfully registered investor, who are verified as Accredited Investors, and those who pass the due diligence, will be able to see Active listings)
- Upon activation of your profile, login to view the investor portal that shows your current portfolio including the portfolio value, annualized net return, and pending orders
- Browse and select investments – You can browse through the listings at any time to view the fact sheet of our listed loans and thereafter consider to invest on those matches closely with your risk appetite and tolerance.
- If you are interested in investing in any of the listings, you can transfer funds to the bank account listed on the platform (operated by the escrow agent)
- We will reflect the new funds on your account balance within 24 hours - you can then select any of the available facilities and decide how much funds you want to commit
- Once a minimum of 80%, is subscribed and the borrower accepts it, we prepare the legal documentation for the parties to enter into the agreement
- The funds are disbursed to the borrower and we set up GIRO/FAST on the borrower's account for automatic monthly repayments
- Every month we collect the repayments and update your account balance
- You may request to withdraw your funds through the platform using the "Withdraw Cash" feature
How long does it take?
Registration process should take no more than 10 minutes and activation of the account no more than 1-2 days. Investment decision is up to you. The facility stays open on the platform for up to 30 days or until it is at least 80%, whichever is earlier. Once the facility is accepted by the borrower, we need no more than 3-4 days to prepare the legal documentation and finalize the funds transfer.
What is the minimum amount I have to invest?
The minimum offer is $1,000 and in subsequent increments of $1,000.
What happens to my funds after making an offer?
The funds will be earmarked for that particular note subscription and cannot be used to make another offer until the listing closes
Can the borrower repay early?
The borrower can repay early subject to a first 3-month non-repayment period. There is no early repayment fee.
What happens if the borrower misses the payments?
We closely monitor our loan portfolio and strive to identify potential payment issues before missed payments occur. However, if a borrower misses or delays or fails to pay the scheduled repayment, then Crowd-genie will:
- Flag that loan account immediately - Crowd-genie will activate procedures to email, SMS and / or call the borrower. Every action and feedback (or lack thereof) obtained from the borrower will be recorded on the platform and communicated to all affected investors
- Charge the borrower a late payment fee on the outstanding principal payable to lenders for each day the payment is late until it is settled. Investors could expect 50% of this to be shared with them, if collected.
- Engage the debt collection services of 3rd party professional debt collectors to collect the money on the investors' behalf if the borrower fails to repay after a period of 30 days. Any collections that the debt agency collects will be passed on directly to the Lenders, less any applicable charges or fees of the debt collection agency. Crowd Genie will not charge any additional fees.
- Categorize the loan as “default” any time between 30 to 90 days after missed/ late/ partial payment. This means that the note will be terminated and the outstanding balance (including interest till the end of the original term, late payment fee, late payment interest) will become immediately due and payable. Crowd-genie would advise the lenders if they want to start a legal proceeding against the borrower. The cost of the legal proceeding shall be borne by the lenders
- Report such default in payment to the credit bureaus which will have a detrimental mark on the credit standing of the borrower and personal guarantor
Are investors compensated for late repayment by the borrower?
A late payment interest of 3% per month on the outstanding principal payable to lenders for each day the payment is late until it is settled. Investors should expect 50% of this to be shared with them. This will start to accrue 7 days after the due date.
What is the legal validity of the loan contracts?
The contract notes are enforceable in Singapore. Each contract is formed after a process of offer and acceptance occurring electronically on the platform
What are the checks on the information?
When documentary proofs are submitted, the Crowd-genie team will verify the information by an independent third party, such as bank, auditors, or credit rating agency. If the information disclosed by the borrower tallies with the documentary proofs that have been submitted to us, we apply a "verified" status next to the information field. We perform these checks on good faith and best effort basis. While we will do our best to verify the information, we cannot guarantee against possible frauds or other malicious intents.
Can I cancel my confirmed investment?
No, you cannot. Once an investment is committed, you cannot withdraw your committed investment. This is to be fair to the SME borrower, as any withdrawal would disrupt its crowd-funding process. Therefore, please carefully review your selection before making an investment.
How often are the repayments made?
Borrowers repay the principal and interest of the loan on a monthly installment basis to the trust account held by our escrow agency. You could see your updated balance by logging into your account.
You also have the option to reinvest the repayment amount into other loans thus increasing the returns potential for the same invested amount.
Are personal guarantees a type of security?
We often take personal guarantees from directors and shareholders. These personal guarantees are a type of “quasi-security” because the security is not being given by the borrower, rather by another party (the guarantor). Becoming a personal guarantor is a serious commitment, please read the what it means at moneysense.gov.sg
How do I make a withdrawal?
You are free to withdraw any amount anytime through our platform, provided you have not committed the funds to any loans. Upon receipt and confirmation of your withdrawal request, we would instruct the escrow agency to transfer the funds to your account in 2-3 business days, free of any transaction fees. You will need to give us this notification of withdrawal by logging on to Crowd-genie and following the instructions for withdrawal under the “my account” section.
Is Crowd-genie responsible if the borrower defaults?
No, Crowd Genie is not responsible for any defaults. In addition, the loan investments are not guaranteed or insured.
Does bankruptcy allow the borrower to get away without paying the debt?
In a case of borrower's bankruptcy, the lenders still have claim over borrower's assets, the rights of the lenders depends on the specific securities pledged for a particular loan. Implications of bankruptcy in Singapore are very severe. Please click here (http://bit.ly/2obiD8q), at a site run by Singapore government, to understand the implications better.
How do you prevent borrower fraud?
We run a number of checks to prevent fraud on our platform, among others:
- For all the parties registered on the platform we perform identity check (NRIC scan for individuals and ACRA's Business Profile for companies)
- We perform anti-money laundering and combating financing of terrorism checks on all key shareholders of the company
- We only register individuals and companies that have a bank account with a Singapore-registered bank
- We run extensive credit risk assessment that involves checking both corporate and directors' credit bureau scores
- We meet the borrower at least once in person
What are the legal documents that I will have to sign to legally lend money?
The key documents that govern the provision of our services include Terms & Conditions and Promissory Note.
What are the tax consequences of lending?
Any interest earned through lending activity in Singapore is subject to taxation and should be declared to IRAS. Please seek independent advice on whether you are subject to taxation in other countries
How long does it take for the registration to be approved?
After all the required documents are submitted, our team will review the documents. You will get an email notification on the status within 2 working days.
Am I subjected to the Moneylending Act?
We have obtained professional legal advice that the activities by investors on the platform do not fall under the purview of the Moneylenders' Act.
What is the contractual agreement between investors and the businesses?
When the borrower accepts the offers, a contract is formed between the borrower and each investor. Both the borrower and investors are bound by the terms of the contract note executed in this manner, having endorsed the platform's terms and conditions.
Once the final note has been accepted by the Borrower, an email confirmation will be sent to the borrower and investors
Can I still make an offer even if the request is 100% funded?
As long as the listing is "LIVE" and has not been accepted by the prospective borrower, you can still make an offer.
Are the notes secured against any collateral?
No. Currently, we offer only un-secured loans that have the company's director(s) and/or shareholder(s) need to act as personal guarantor(s).
We may look at secured loans in the future.
Can I transfer or sell my note to another party?
The note agreement is non-transferrable and is strictly between you and the Borrower. There is also no secondary market, i.e. no liquidity for the notes. Please be expected to put aside the offered amount for the associated tenor of the note.
When do I receive my repayments?
Before investing in a campaign, you can easily check the borrower’s indicated tenor on the Dashboard. The repayment dates will be indicated in the contract note and under the Investments Table on your Dashboard.
If the due date falls on a public holiday or weekend, you will receive your repayment in the on the next working day.
The funds will be credited to your account held with the escrow agent.
What happens if the subscription to the listing is more than the maximum ceiling proposed by Crowd-genie?
We will follow the principle of first come first serve. That means, those who invested early will get priority compared to those who came later. If you are one of the last, and the addition of your investment leads to the breaching of the ceiling, then only the portion of your investment that keeps the total commitment to within the ceiling will be taken, and the excess will be returned back to your account.
To illustrate, suppose the maximum investment that XYZ pte. Ltd. wants to take is S$100,000, and the current investments from other investors is S$ 95,000. If you want to invest S$ 10,000, then that will go beyond the maximum investment allowed of S$ 100,000. So, in this case, you will be able to invest only S$ 5,000 in the listing; and the remaining S$ 5,000 will be refunded back to your account.
How is the investors’ effective interest rate calculated?
The Effective Rate of return is the Internal Rate of Return (IRR). Click here to understand about Internal Rate of Return.
For example, let’s take loan of S$50,000; with a monthly repayment of S$8,776, then monthly IRR, using the Excel function would be 1.5%.
Having found the monthly IRR%:
- Interest payment = Monthly IRR% * Outstanding Principal
- Principal repayment = Monthly repayment – Interest Payment
See the table below for illustration: