You all have probably heard of crowdfunding by now, but what about crowdlending? Crowdlending, also known as peer-to-peer lending (P2P lending), is the practice of lending money directly to individuals or businesses through an online service. It gives borrowers an alternative to lending from traditional financial institutions such as banks, and it provides lenders with potentially higher returns on their investment compared to traditional savings and investment products offered by banks.
Juggar is a new crowdlending platform launching here in Singapore and this article will give you more of an idea on what it is, how it works, and how you can use Juggar to make your money work harder for you.
WHAT IS JUGGAR?
Juggar is a crowdlending platform that brings together lenders (investors) and borrowers. The platform allows lenders to lend funds directly to borrowers who are looking to invest in shares listed on the Singapore Stock Exchange. Juggar also implements protectionary measures to minimize the downside risks of lenders’ investments.
HOW DOES JUGGAR WORK?
The Juggar platform works like an open marketplace. Borrowers list their needs and criteria on the platform in terms of loan amount, loan tenure, loan interest rate, intended stock purchases etc. Lenders can browse through the list of borrowers to find a criteria that is suitable for them and decide which borrower they would like to loan to. Borrowers are required to pledge a 30% collateral with either cash or shares of Singapore-listed companies. The lender then funds the remaining 70% of the loan amount.
Juggar’s system and processes are designed to achieve the highest level of integrity possible. Unlike some other P2P lending platforms, funds are not delivered into borrowers’ accounts. In addition, shares are held in custody to minimize potential risks.
WHAT ARE THE BENEFITS OF LENDING THROUGH JUGGAR?
- YOU EARN HIGHER INTEREST RATES
Juggar essentially removes the “middlemen” between lenders and borrowers so you receive higher interest rates compared to your bank’s fixed deposit schemes and Singapore Government Savings Bonds.
- YOU HAVE MORE FLEXIBILITY
You get to determine the interest rates and period of loan that you are happy and comfortable with.
- YOU DON’T NEED TO BE A BILLIONAIRE TO TAKE PART
As this works like an open marketplace, there is a lower minimum investment amount compared to traditional financial institutions. That’s the benefit of P2P crowdlending platforms – many lenders can come together to fill up a big-ticket loan and you will not have the fear of missing out!
- YOUR RISK IS MINIMISED
Juggar reduces downside risk for lenders by securing highly liquid collateral from borrowers.
- YOU KNOW WHERE YOUR MONEY IS GOING TO
There is higher transparency with Juggar as you get to see what your money is being invested in compared to other crowdlending alternatives such as lending to private companies or purchasing credit invoices