SG P2P lender Capital Match to be liquidated

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Singapore-based peer-to-peer lending firm Capital Match will be put up for liquidation, according to an email sent to investors today.

“A liquidator will be appointed to manage the operations and communication with the platform investors moving forward, from 11 May 2023,” said the email, which was seen by Tech in Asia. No further details were given.

Founded in 2014, Capital Match links investors with SMEs seeking loans.

Its business model involves invoice financing, where it disburses cash to SME borrowers based on invoices that these companies have issued, which represent owed payments. The loans are funded by individual investors and repaid directly to Capital Match by the debtor – the invoice recipient – at a later date.

In February 2022, Tech in Asia first reported on Capital Match’s irresponsible lending practices, including providing misleading information to investors.

The firm, which is not licensed by the Monetary Authority of Singapore (MAS), was subsequently placed on the regulator’s investor alert list.

Image credit: Timmy Loen

At that time, Capital Match was waging a costly lawsuit at the Singapore High Court against a subsidiary of electronics manufacturer Sanmina Corporation for S$10.4 million (US$7.7 million) in repayments on claimed outstanding invoices. It was also in the process of legal proceedings against other debtors, including Japanese textile manufacturer Toyobo.

Then, in February this year, a former director of shipbuilding firm Lal Marine and Construction was sentenced to five years in jail for using fake invoices to obtain loans from Capital Match, causing the platform to lose over S$1.3 million (US$980,000).

While it’s unclear how many investors Capital Match has on the platform, the sums involved in all of these lawsuits are likely affecting hundreds of investors.

According to MAS, whether a platform needs to hold a Capital Markets Services license in order to facilitating invoice factoring depends on its business model.

See also: Another P2P lender goes south: millions on the line for Capital Match’s investors