“That was the moment I realised that as much as we have been actively educating the market over the last few years, there is still a lot of misunderstanding within the space. It is not that they are bad SMEs [small and medium-sized enterprises] or risky SMEs and that’s why they can’t get bank loans,” Teo tells The Edge Singapore. “It’s just that banks are fundamentally set up to support specific loans and needs, and sometimes, that does not include what SMEs really need.”
SINGAPORE (July 8): Kelvin Teo, co-founder of peer-to-peer (P2P) lending platform Funding Societies, remembers vividly the moment the owner of a medium-sized real estate management company thanked him for approving a much-needed loan. The owner had needed only a small, short-term loan that would allow him to hire more staff, as he had just secured a contract to manage a brand-new property — a big achievement for the company. He was so thrilled, he agreed to be featured in a video testimonial for Funding Societies. Teo was proud and felt that he was making an impact.
Unfortunately, some years later, the same owner asked Funding Societies to remove the video from the platform’s website. Some of his clients had heard that he received funding from a P2P platform instead of a “proper bank”, and expressed their doubts about his business because he could not get a bank loan.
