Capital Match on making money from Peer-to-Peer (P2P) Lending

In this article, SG Wealth Builder is pleased to catch up with Pawel Kuznicki, co-founder of Capital Match, a homegrown Singapore-based peer-to-peer (P2P) lending platform that helps Singapore SMEs obtain loans financed by individual investors.

1) Peer-to-Peer lending is something new in Singapore. In your opinion, what are the potential pitfalls that investors should look out for when choosing the right platform to invest?

The key risk of this type of investment is a default risk of the borrowers. The investors should carefully assess if the information provided to them about the potential borrower is sufficient to make an informed decision on the risk involved and if the proposed interest rate is sufficient to compensate for the risk.

2) How does Capital Match deal with default loans and what mitigating measures can investors expect from Capital Match?

If the default were to happen, we would employ a debt collection agency to attempt to collect the debt from the borrower. The directors of the borrower have to provide personal guarantees so the debt can be collected both from the company and its directors. If the debt collection is unsuccessful, we would then advise lenders if they should start the legal action against the borrower.

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BullionStar offers Gold Buffalos for only spot price of gold +3.99%!

Below is a newsletter from BullionStar, a bullion dealer based in Singapore which exempted investment grade precious metals from the goods and services tax (GST). Just like BullionStar, one of the the goals of SG Wealth Builder is to educate Singaporeans on the merits of owning gold and silver bullion as a means of wealth preservation. 

We are currently offering 1 oz Gold Buffalos (2013, 2014 and various years) for only the spot price of gold + 3.99 %. The offer is valid until 4 May or as long as stocks last.

The Gold Buffalo was first minted in 2006 and is the only 1 oz .9999 gold coin produced by the United States Mint. Encapsulating a monumental time in history, this beautiful coin is a modern rendition of the James Earle Fraser’s 1913 Buffalo Nickel, produced in pure .9999 fine Gold.

New Sales and Operations Manager

We would like to introduce our new Sales and Operations Manager, Mr. Luke Chua.

Luke brings with him the skills and experience required to propel us forward in the areas of customer experience, operational efficiency and effectiveness.

If you have any development ideas or would like to give us any feedback, please feel free to contact Luke.

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Why Singapore investors always lose money in shares

For the past few years, there has been a proliferation of young investment bloggers in Singapore. While I am not sure if this is a good phenomenon, it certainly reflects a growing interest in the stock market among young Singaporeans. However, have you paused to wonder why Singapore investors always lose money in shares?

Many years ago, a veteran in the stock market told me that when taxi-drivers, housewives and students start to dabble in shares, it’s a warning sign that the market has peaked. In fact, for the past few years, the stock market in U.S. has rallied and surged to multiple highs. Entering the market during this boom period can be dangerous because many stocks have risen beyond their fair values. In such case, the return of your money is far more critical than the return on your money.

You must have heard of Warren Buffett’s famous quote “be fearful when others are greedy, and greedy when others are fearful”. To be frank I am not sure whether Warren Buffett practice what he preached because in reality, nobody knows how he invests behind the scene. In reality, telling this to someone who try to find value stocks in the current market is akin to telling a horny male to remain celibate, and thus, I often find this quote unhelpful.

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Gold and the currency market

For the past few weeks, the rising Singapore dollar has caused substantial market swing in the currency market. Notably, Malaysia ringgit reached a low on April 17 when one Singapore dollar could buy RM2.7234. This inevitably created worries for many Malaysians who travel to Singapore or send their children here to study on a daily basis. The unfavorable exchange rate has reduced their purchasing power substantially.

If you think that the currency movements affect only forex traders, then you are wrong. In fact, it affects our daily lives because a stronger Singapore dollar can make imports cheaper and hence, help to curb inflation.

Indeed, the exchange rate is merely a tool used by many central banks, such as the Monetary of Singapore, to manage the country’s economy. From an investor’s standpoint, volatility in the currency market may not be a good news if the majority of their wealth is in cash holdings. Just imagine, a Malaysian millionaire who stash most of his bank savings in Malaysia ringgit must be very worried now. This is because the ringgit may depreciate further due to the strengthening of US dollars and potential analysts’ downgrades.

On the other hand, Singapore investors should not be complacent and think that Singapore dollar would always remain strong.

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Crowdfunding will be a game-changer for retail investors

For many years, investors in Singapore have been lamenting the lack of fixed income investment opportunities. This is because most of the corporate bonds in the market are accessible only to the institutional investors. Further to this, the dream of owning a second property to generate rental incomes for retirement purposes has also become unattainable for many retail investors after the implementation of the slew of property cooling measures. The emergence of crowdfunding is set to change all this. In fact, crowdfunding could well be a game-changer for the financial sector in Singapore.

In a consultation paper issued by Monetary Authority of Singapore (MAS) in February 2015, the MAS recognizes the enormous growth potential of crowdfunding and defines crowdfunding into four forms, namely: donations, reward-based, lending-based and equity-based. MAS deems that the latter two involves exchange of “debentures or shares”, and hence, they would be subjected to securities regulation.

Currently, there are a few companies in the market that offer lending-based crowdfunding services in the form of “peer-to-peer lending”. One of them is Capital Match, co-founded by Pawel Kuznicki. According to Pawel, Capital Match aims to provide business borrowers with the next best interest rates after banks and at the same time, offers investors access to attractive yield with a low investment entry amount.

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Importance of managing cash flow

When investors have some monies in hand, one of the most difficult decisions to make is how to use the fund efficiently and effectively. Should you use the money to pay off your outstanding housing loan or car loan? Or should you top up your CPF accounts? Is it a better option to use the money to invest in shares than generate better returns than saving deposits? Or should you invest in a second property to produce a fixed income for your retirement?

cash flow

In any case, there is no right or wrong answer. But my personal strategy is to maintain a healthy cash flow and I don’t like to pay off all my loans and be debt-free. Having some amount of money in hand allows me to invest in appropriate instruments when the opportunity arises and also cover needs during emergency times. But I always make it a point to clear all my credit card bills on time to avoid incurring late payment charges and interest fees.

But just what is cash flow and why is it important to manage it? From an equity investor’s point of view, free cash flow within a company is the balance of money remaining after the operating expenses are deducted.

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Homegrown start-up Capital Match launches peer-to-peer platform to lend to Singapore businesses

SINGAPORE – 14th April 2015 – We are pleased to announce the launch of Capital Match, a homegrown Singapore-based peer-to-peer (P2P) lending platform that helps Singapore SMEs obtain loans financed by individual investors.

The objectives of the company are two-fold:

–          provide business borrowers with the next best interest rates after banks, and

–          give investors access to an attractive yield with a low investment entry amount.

Capital Match (CM) has an in-house credit function that carefully evaluates the circumstances and purpose of each borrower to determine an appropriate loan amount, tenure and interest rate.

This in turn allows CM to provide investors with a curated selection of loans to build their investment portfolio.

Helping SMEs with financing

According to figures released by Singapore SME consultancy Loyal Reliance, only about 13% of loan applications made by its SME clients in 2012 were approved.

“The SMEs we speak to tell us it is increasingly difficult for them to get loans from banks”, says Pawel Kuznicki, an ex-management consultant formerly from Rocket Internet, who co-founded the company with Kevin Lim, an ex-investment banker and Dr. Arnaud Bailly, a software engineer.

“P2P lending will provide a much needed source of alternative financing for our local SMEs.

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SG Wealth Builder Email Interview with BullionStar

SG Wealth Builder is pleased to conduct an email interview with Torgny Persson, CEO of BullionStar, a bullion dealer based in Singapore which exempted investment grade precious metals from the goods and services tax (GST). Just like BullionStar, one of the the goals of SG Wealth Builder is to educate Singaporeans on the merits of owning gold and silver bullion as a means of wealth preservation. 

1) Mr Torgny, in your opinion, what is the outlook for gold in 2015? Given that the economy recovery is gaining traction in United States, would there be any negative or positive impact for gold prices moving forward?

The so called recovery is a phony recovery in my opinion. The economies in the West are facing a lot of underlying problems with unprecedented debt levels, trade imbalances, high unemployment and misallocated investments. The current monetary system based on fiat credit and fractional reserve banking is going to implode under the debt burden. The price of gold thus hasn’t got so much to do with gold but everything to do with how worthless our currencies get.

Gold will revalue significantly in terms of purchasing power in the monetary reset we are soon to embark on.

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Property: Foreign Investment Opportunities

Below is a guest article contributed by Lamudi, a German properties listing company. Given the current cooling measures, many Singapore investors are turning their eyes on property market in South East Asia countries. Investors should be aware of the risks involved and the regulations in these countries to avoid losing monies in such investments.

2015 is predicted to be the year when many emerging markets in Asia such open up their property ownership to include foreigners. As it stands in many countries, non-citizens are prohibited from buying properties. For example, in Philippines the country’s constitution bans non-Filipinos from owning land and in Sri Lanka non-citizens pay more tax when they own any property.

However, there are signs that this may be about to change. 2015 will see countries in the Association of Southeast Asian Nations (ASEAN) merge to form a single market. The establishment of the ASEAN Economic Community is expected to boost foreign direct investment in the Philippines and also in untapped markets across the region, putting pressure on lawmakers to amend these ownership restrictions. This year, foreign ownership laws will also come into focus elsewhere in Asia, with debate set to continue in Indonesia and Myanmar about opening up the countries’ property sectors to international investors.

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The most financially challenging period of my life

On 8th of April, I became a father for the second time! My little bundle of joy came slightly earlier than expected and my wife and I were a bit unprepared because incidentally, my elder daughter happened to fall sick during this period. But thank goodness, my mother-in-law and mum were around to help out. I really appreciate for what they did.

Everyone has the right to procreate and pass on his legacy. Nobody can take this right away from him. But I think most Singaporeans have the wrong mindset about raising kids in Singapore. They always associate money and the high cost of living as two key factors that deter them from having babies. Most Singaporeans want to establish their careers first before having children. Of course money is important, and we need good incomes to support family needs. But then again, how much is considered enough and when is the right age to be considered financially stable to have babies? Before they knew it, many Singaporeans could be well past their child-bearing age in no time and would regret not conceiving when young and healthy.

For the past three years, my daughter had brought us so much love, joy, tears, laughter, anger and frustrations.

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BullionStar: Gold, Governments and Central Banks

Below is an article from BullionStar, a bullion dealer based in Singapore which exempted investment grade precious metals from the goods and services tax (GST). Just like BullionStar, one of the the goals of SG Wealth Builder is educate Singaporeans on the merits of owning gold and silver bullion as a means of wealth preservation. 


Governments and central banks are frequently criticized by goldbugs for being anti-gold. Examples include the Indian government restricting gold import, the US government refusing to carry out a full audit of the US Treasury’s gold holdings and the Swiss government and central bank strongly opposing the “gold initiative” demands.

India, the US and Switzerland are all three on the top 10 list of official gold holding countries and thus relevant for the discussion.


The Indian government and central bank are notorious for repeatedly discouraging gold importing and gold hoarding. In trying to curb India’s trade deficit, the Indian government and central bank, Reserve Bank of India, are working together in pushing a policy they call “moderating gold demand”. There’s currently an import duty of 10 % on gold imported to India.

India, in a rare glimmer of common sense, however recently announced that it had scrapped the weird 80:20 rule mandating gold importers to re-export 20 % of their imports.

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URA improves property price index (PPI) to better reflect price changes in private residential market

Data don’t lie but how it is sliced can lead to different pictures. Therefore in a bid to improve the methodology, the Urban Redevelopment Authority (URA) released the flash estimate of the private residential property price index (PPI) for 1st Quarter 2015.

The rationale for the revision is because there is greater variation in the housing size and age profile of the private housing developments. With this in mind, URA has decided to switch to a regression method and used the period of 1Q2009 as baseline reference.

Flash estimate of 1st Quarter 2015 PPI

Using the revised methodology for the PPI, the overall private residential property index fell by 1.1%. This is the sixth continuous quarter of price decrease. This moderate decline is within my expectation and in my view, the slide is expected to continue unless the government lift some of the restrictive cooling measures.

Prices of non-landed private residential properties declined in all market segments, as they did in the previous quarter. Price fell 0.6% in Core Central Region (CCR), 1.8% in Rest of Central Region (RCR), and 0.9% in Outside Central Region (OCR). Prices of landed properties fell 1.1%.

The Terrace

The flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment, caveats lodged and survey data on new units sold by developers during the first ten weeks of the quarter.

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