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FinTechs belonging to this category operate crowdfunding, crowdinvesting and crowdlending platforms on which money is raised to invest in various projects, mainly start-up companies and real estate projects.
Crowdfunding is not a defined financial service, but generally used to describe donation-based crowdfunding (the investor donates the money to the project), reward-based crowdfunding (the investor receives an often symbolic consideration for his investment), equity-based crowdfunding (crowdinvesting: the investor participates in the profits of the financed project or acquires shares or debt instruments) or lending-based crowdfunding (crowdlending: the investor is reimbursed at the end of the project with or without interest).
Introduction
Attitude of the country towards crowdfunding, crowdinvesting and crowdlending platforms
Singapore is generally acceptable of crowdfunding, especially where it supports SME financing, startups, and financial inclusion and several licensed service providers have emerged in the market to meet this demand. The Monetary Authority of Singapore (MAS) has defined and set out the regulations for different types of crowdfunding models in various issued guidelines.
Legal affairs
Obligations and requirements to provide crowdfunding, crowdinvesting and crowdlending platforms described above
Crowdlending, which is typically regarded as peer-to-peer lending, is regulated by the MAS under the Securities and Futures Act 2001 of Singapore (SFA). Invitations to lend money to an entity are generally subject to prospectus requirements compliant with the SFA unless the offer meets the requisite requirements to be exempted. Platforms providing crowdlending services will need to hold a Capital Markets Services (CMS) licence issued by the MAS, unless exempted. Crowdfunding and crowdinvesting platforms that are equity-based are similarly subject to regulation under the SFA and the requirement to hold a CMS licence.
Crowdfunding that rewards funders with non-equity incentives are generally not regulated. Entities collecting funds through donation-based crowdfunding are not regulated by MAS and the SFA but may be subject to the regulations on charities law. The Charities Act 1994 sets out the compliance requirements for charitable fund-raising appeals in Singapore.
Additional comments regarding the legal situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area
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Economic conditions
Market size for crowdfunding, crowdinvesting and crowdlending platforms and biggest companies in this business area
There is no official data on the market trends in crowdfunding, crowdinvesting and crowdlending. CMS licensees FundedHere and MoolahSense are crowdfunding platforms based in Singapore that have become a market leaders in this space.
Additional comments regarding the economic situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area
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