CapitalBay receives SC approval to operate P2P financing platform

  • Retail investors can now participate in high-quality financing deals alongside banks
  • Investors can expect to earn double-digit annualised returns up to 18%


(From left) Dion Tan, Darrel Ang, Malaysian Finance Minister Lim Guan Eng, SC chairman Syed Zaid Albar, Ang Xing Xian and Edwin Tan

CAPITALBAY, a Malaysian multi-bank supply chain finance platform has received the approval from the Securities Commission Malaysia (SC) to operate a peer-to-peer (P2P) financing platform.

The registration licence was presented on May 17 in a ceremony hosted by the SC shairman Syed Zaid Albar and attended by the Minister of Finance Lim Guan Eng.

Established in 2016, CapitalBay has been working with multiple banks in Southeast Asia by enabling digital supply chain financing for their clients through its platform.

With the P2P approval, retail investors are now able to access the platform, allowing them to participate in high-quality financing deals that were previously only available to banks and institutional funders. Through this initiative, retail investors are able to invest alongside banks.

This is in line with Prime Minister Tun Dr Mahathir Mohamad’s vision of “shared prosperity” where the public can enjoy equitable growth.

CapitalBay specialises in short-term working capital financing, offering products such as invoice financing to small and medium enterprises (SMEs) across various industries. Its financing solutions enable B2B suppliers to be paid earlier for their outstanding invoices by allowing them to sell their invoices for cash upfront.

As for B2B buyers, CapitalBay provides financing solutions such as deferring payment due date by paying their suppliers first. Since starting operations in Q4 2017, CapitalBay has financed over 1,300 B2B transactions worth RM75 million.

“Cashflow is the lifeline for many businesses. Today, many small businesses struggle with cashflow and traditional lending models find it difficult to fulfill this gap. We believe that by shortening the cash conversion cycle for businesses, this unlocks cashflow for them to grow their business, which is the basis for setting up CapitalBay,” says co-founder Ang Xing Xian.

“With the P2P approval, we would like to invite investors to join us in our mission to provide smart and inclusive financing to businesses across Southeast Asia. This will enable businesses to grow and prosper, ultimately improving the livelihoods of the business owners, employees, and the community we all live in,” says Ang.

CapitalBay added that its investors can expect to earn double-digit annualised returns up to 18%. Furthermore, its business payment financing products have shorter tenures (typically two months), therefore providing more flexibility with lower risks.

According to CapitalBay, investors can take further comfort as most of its financing deals are backed by invoices due from large credible institutions such as multinational companies (MNCs), blue-chip companies and government-linked entities with lower default risks.

Traditionally, banks’ credit assessment processes are tailored for larger deal size, with emphasis on business financial statements and collateral. This results in a high rejection rate for SMEs who require smaller loan sizes and shorter financing tenures as it may not be commercially viable for banks.

CapitalBay leverages on technology to build a unique payment risk scoring model that predicts the risk of each transaction on its platform through machine learning. This opens up access to financing for the under-served SMEs. Since its launch, CapitalBay’s data-driven approach has kept its default rate at 0%.


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