MicroLeap peer to peer Islamic microfinancing referral code : 212113

Microleap is one of the many security commissions (think Fundaztic, Funding Societies, Capbay, B2b Finpay, Capshere, Cofundr) approved peer to peer (p2p) lending/financing companies. Microleap brands itself as Malaysia’s first platform that offers both Islamic and conventional peer-to-peer (P2P) financing. It has a caption line of "Small Steps, Big Impact".

Microleap's team has got a name I'm familiar with Tunku Imran who is a partner of the company. Tunku Imran used to be a visible figure in Malaysian sports, helming the post of president in Olympic council of Malaysia and Commonwealth Games Federation. I think the founder could be related to Tunku Imran also.

Microleap operates at in a niche area of funding, their notes listed are quite small in amount (<RM50,000) and long in tenure (~36 months). Most of their borrowers are sole proprietors running small scale businesses. I've seen some of the notes only raise RM5,000 and according to Microleap, the minimum amount that can be raised can be as little as RM1,000. Therefore, MicroLeap is specializing in the micro-loan area. Other p2p financing companies like Fundaztic, Funding Societies and Capbay fund much bigger notes than Microleap. Update: MicroLeap now has a product called MicroLeap+ to raise funds from as big as RM100,000.

One unique feature of Microleap is its notes/loans are Islamic notes (I hope I'm putting this correct), Islamic notes ,there are no borrowers from wine shops, tobacco shops, hotels, credit lending companies, swine farms, restaurants serving pork and wine, conventional insurance and unit trust agencies. Microleap do have conventional notes/loans but they are a minority 1%. Microleap seems to be focusing solely on Islamic notes. As Islam frowns on paying of interests (riba), Microleap requires borrowers to sign up using a profit sharing Islamic loan agreement (Mudharabah concept) to ascertain the profit rate the borrower gets.

The minimum amount to lend out under Microleap platform is RM10 only, this is considered a small amount but also understandable considering the risks involved. Interestingly, the borrower/company of the micro loan/notes is made known, even the face of the borrower is revealed. Usually this info is not provided by other p2p companies to avoid borrowers going after the lender personally or interfere with the debt collection process. Each loan/note is provided a credit score with HR10 being the riskiest while LR1 being the most credit worthy. According to Microleap, each note has a P.A (Personal Accident) insurance tied to it, in the unfortunate event something happens to the loan borrower, the insurance will pay out all lenders.

Like all p2p apps, Microleap has auto invest feature to automate investors lending to borrowers. You can filter out the notes/loan risk, tenure and industry. Microleap has an additional filter other p2p apps don't have which is filter by state (eg Selangor, Pahang).

Personally, I feel this micro lending concept quite risky to me. While most of these businesses are underserved, banks won't touch these types of loans, banks rather give these businesses high interest personal loan to them to mitigate the risk. Most of the business owners are in the B40 (below 40%) group and this could be their 1st time taking a loan.

The strategy I'm adopting here would be only put in the minimum amount to a business I've selected to lend out my money. I also will need to be very selective in selecting which business to give loans. The notes need to have very high credit rating also (at least LR3 and below).

Updates Feb 2021

Been few months since I signed up and still waiting for grade A notes to appear. So far all the notes I have seen since I signed up are above LR3 (low risk) category. I'm enabled auto invest to invest only in notes above LR3.

Updates Apr 2021

I've decided to put some test money into 2 notes. Each of the notes I only put in RM50. These notes were medium rated notes.

Let's see how it goes.

One of these notes was for upcoming Ramadan Bazaar funding. Microleap took an RM1.20 arrangement fee (aka service fee). The repayment tenure is 3 yrs. To be frank this note is quite high risk also as tenure is long and amount borrow is small. For the sake of testing the platform I weighed the risks and the worst case scenario is I will only lose RM50 on this note.

Updates May 2021

I've put in RM100 into a new note. The business is a precast retaining wall business and a specialist contractor. I think this business is in demand for preventing landslides and flood mitigation in Malaysia and as such I based these points to decide on my investment. However, this is just my own formed opinion without looking at the owner's background and company financial records. Let's see how this investment goes.

Updates May 2021

Just got my 1st ever Microleap loan repayment.

On the other hand, was quite surprise another note that I put in RM50 missed the 1st payment, the company behind it seems quite credible. Let's see how it goes on the upcoming payment.

Updates June 2021 - MicroLeap+

Wow, finally the 1st payment which was delayed for a note last month was paid.

On another note, MicroLeap launched MicroLeap+ , it's basically loans at bigger quantum, up to RM500,000. Investment Note payment is based on Balloon Payment method where the Issuer will make monthly Profit-only payments for the preceding months followed by a Principal + Profit payment on the final payment date.

Updates Sep 2021

The notes which previously were delayed payment were all paid already. My portfolio now has a net profit of RM3.50

This previous lending note which I thought was going into default already, ended up being paid and back on schedule. I remain optimistically caution on the current Malaysian economy but I believe the economy is currently in a U shape recovery.

Before

Now

I noticed also MicroLeap seems to have signed up many notes recently from various industries. I find it quite interesting because unlike other P2p issuers, the borrower name and company is revealed, making it easy to do prior investigation on the company.

Updates Oct 2021

Oh my this has got to be the highest quality note listed at MicroLeap. A funding for fintech company MoneyMatch of 1 million. I took opportunity to invest some money in this note. This company is more than an A+ rating customer so lending to this loan is a no brainer.

The news is out already here :

https://www.theedgemarkets.com/article/moneymatch-partners-microleap-provide-islamic-financing

Updates Jan 2022

MicroLeap p2p is in the news again with their collab with SME Corp to provide Shariah Compliant financing.

April 2022

Another famous company, the Lorry.com is a transport aggregator like LaLamove, is raising funds via MicroLeap. I've put in some cash into this note, I consider this company A+ company. Great job to the team at Microleap to get these quality notes.

For now, I'm only investing in Microleap+ notes, not that interested in the smaller types of loans (microloans) so will keep a lookout for these notes. So far all my notes don't have any defaults , a few late payments here and there. However I'm just concern with those microloan notes which have long tenure more than 1 year, too unpredictable and longer time to get back my capital.

Dec 2022

I had my 1st default already, it's from one of the very 1st investments I made. Good thing is I only put in RM50. The lender was a clothes designer and the business was hit badly by covid. The note also was not a MicroLeap+ note so I had already expected the risks involved. I'm still actively involving in the notes investment but am cautious of the companies that I'm putting money in.

MicroLeap Referral/Invite Code 👉 212113 (2022 still valid until December)

I've signed up to Microleap and got free RM10 credits for signing up, I further topped up additional RM100 for future usage. You can use my 👉 referral code 212113 to sign up for a new account, both of us will get RM10 as reward.

⚠️WARNING : The borrowers can be considered quite risky as these are very small businesses so do not lend out a lot of your cash and make sure to scrutinized every business you lend out to. Do your research also before doing p2p (peer to peer) lending.