Social Lending – Gaijinhan

Social Lending

Social lending has been around for a number of years now and if you are seeking new avenues of growing your money in Japan, it could be one option you want to look at.

There are, of course, several options available and among them, the more popular ones appear to be OwnersBook by Loadstar Capital, and Crowdcredit by Crowdcredit.

Personally, the name Loadstar Capital sounds like some dubious Cayman Island-registered business. However, the company is listed on the Mothers (Market of the high-growth and emerging stocks) section of the Tokyo Stock Exchange, which means they would’ve been thoroughly checked before becoming public. OwnersBook mainly deals with domestic real estate funding and its published returns are fairly low, at about 4-5% but the benefit of it is that if the properties are sold off before the loan period is up, returns can increase to about 14-15%. Investment period typically ranges between 9 months and 3 years. I haven’t used OwnersBook myself but according to information from bloggers who are investing on the platform, the returns are typically paid out once every quarter, so you get about 1% of your investment each payout period. The other benefit about OwnersBook is that, the minimum investment sum is 10,000 yen (about SGD$120), which makes it easy for anyone to make the jump and give it a shot. But I’ll need to read up a bit more before deciding if it’s for me.

The other platform, Crowdcredit, is a very different social lending platform in that it specializes in foreign loans mainly in Eastern Europe, the Baltic States, Cameroon, Peru, and Russia, and the company has announced plans to expand its loans to North America and Australia to cover all continents. While the company is not listed as yet, it has grown rapidly largely due to the reputation of its backer, Itochu Corporation, one of Japan’s largest trading companies. Like OwnersBook, Crowdcredit accepts a minimum investment of 10,000 yen and offers returns of between 4-12%. Investment periods are typically 7 months, 13 months, or 3 years. However, the Baltic States vehicle lease funding can range from 6 months to 66 months depending on the actual loan your funds are being used on. As the company deals with foreign loans, many are funded in such foreign currencies as USD, EUR and RUB. However, some of these funds offer currency hedging, which is a good option for people who are willing to lower their returns for peace of mind off the volatile FX market. The company also provides the status of each fund’s performance once a month on their site, so if you are the uptight kind, you don’t have to sit at home wondering how your investment is doing.

And because I don’t want to let my money sit in the bank anymore, I tried searching for similar platforms in Singapore and found MoolahSense. While I haven’t done enough research into it, it seems that there isn’t as ample information on the funds available as the platforms in Japan. And the minimum investment sum of SGD$1,000 may be a bigger hurdle to cross than the platforms here. I’ll have to read up more on it but if you have information on MoolahSense, please share your experience, insights or opinions.

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