TECHNOLOGY, and in particular Financial Technology or Fintech, has the ability to accelerate access to financial services for the unbanked and significantly reduce costs for businesses.
Given that 70% of the ASEAN consumer market are younger than 40 years of age and with the emergence of a highly digitally active middle-class population across Southeast Asia, the internet economy is expected to reach a high of US$200 billion by 2025.
Furthermore, research estimates that there will be more than 480 million internet users by 2020. It comes as no surprise that the Fintech revolution is only just beginning in Singapore and Asia.
On the backdrop of this vast potential and steep growth of Fintech, Minterest was incorporated in March 2016 and licensed by the Monetary Authority of Singapore to facilitate the offering of loans to SMEs from investors around the region. It is a leading online marketplace funding platform founded by a team of former bankers with more than 155 years of collective experience in corporate and structured finance.
By providing quick and efficient access to capital, Minterest seeks to alleviate companies that have difficulties receiving financing from banks through offering an alternative solution to this pain point. Its sister company, QianNow Pte. Ltd. (https://qiannow.com), will also be providing consumer loans to Singpore based individuals at a rate that commensurates with the individual’s risk profile. Individuals will be able to enjoy their own personalized interest rate, instead of a standard rate across the entire population.
Minterest’s marketplace funding platform (https://minterest.sg) is based on the motto “financing made simple, investments made easy”, which is what borrowers and investors will experience when using their platform. Minterest believes that each borrower and its requirements are unique, therefore a one-size fits all model practiced by banks or finance companies will do no justice to the requirements of different SMEs and organisations.
That is why Minterest’s credit assessment process takes into account the exact requirements of each enterprise before delivering an appropriate financing solution. This also allows Minterest to offer well-structured, risk-mitigated investments to its investors.
Instead of using conventional methods of assessing propriety credit, Minterest believes in alternative methods that are more tailored to individual companies and invests heavily in relevant technologies to deliver on this directive.
For instance, they have built and developed their own proprietary credit assessment algorithm (“MintGrade”) to assess an organisation’s or SME’s loan application, leveraging on data obtained from independent third-party sources such as credit payment profiles and litigation searches.
Borrowers are then efficiently and effectively matched with investors using this technology resulting in endless possibilities for borrowers to reach a wide-ranging investor base.
“Using our proprietary credit scoring model with over 350 data points of each borrower, we are able to curate a strong portfolio of creditworthy borrowers who would be underserved or unserved by the traditional credit providers,” explains Minterest co-founder and CEO Charis Liau.
Generally, funding are secured within 2 weeks, or in a matter of days. 97% of all deals listed on the Minterest platform are funded by investors within a day. The speed, efficiency and certainty of Minterest’s process paves a new way of fund raising for corporates.
Diversification is key to successful investing and that is why financial inclusion is at the heart of Minterest and their operations. Minterest offers a variety of loan and invoice finance products to allow its investors to diversify across multiple borrowers as well as across a broad risk spectrum.
They empower investors by allowing them to participate and invest easily in business loans from as low as S$250. Loan sizes range from $30,000 to over $3 million with average tenor less than 6 months.
As marketplace funding gains traction and becomes more mainstream, larger corporates are also seeing the benefits of raising funds through a wide pool of investors. Minterest have welcomed such initiatives as their goal is to build tomorrow’s financial ecosystem to be one that served rather than rules.
As part of its expansion roadmap, it will be investing heavily into blockchain and artificial intelligence technology.
Minterest Group has been amongst the few chosen by the Ministry of Law to pilot new money lending practices in Singapore. Under the consumer finance umbrella, QianNow will serve the needs of consumers in Singapore who require financing for various productive reasons such as medical and healthcare loans.
It employs ground breaking credit analysis taking into account one’s unique personality educational background and job history in assessing the credit profile of an applicant. Psychographic tests are also being incorporated as part of their credit assessment system for a more accurate evaluation.
Minterest’s efforts to develop the Fintech industry have not gone unnoticed. It has been recognized as the Top 25 Fintech Companies in Asia Pacific (2017) and the top 25 Hottest Fintech Companies in Asia Pacific (2018) by the APAC CIO Outlook. Best Peer to Peer Lending Platform, in Singapore by Global Business Insights, 30 Best Small Companies to Watch 2018 by The Silicon Review, Top 30 Most Influential Entrepreneurs to Watch 2018 by Insights Success and now attaining the Business Eminence Award by Dun & Bradstreet Singapore.
With their current endeavors and plans for the next few years, Minterest is achieving its vision of creating a sustainable community in which investors and businesses mutually benefit by collaborating and leveraging on innovations in financial technology.
The article was contributed by The Business Times.
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