Fatfish Group Limited (ASXL:FFG) will launch a Buy-Now-Pay-Later (BNPL) business for corporates via its investee company Smartfunding Pte. Ltd, which is 58.8% owned by FFG’s Swedish subsidiary Abelco Investment Group AB.
Smartfunding is a Singapore incorporated company that is licensed by the central bank of Singapore.
In addition, FFG has entered into a binding term sheet to acquire an additional direct 19.9% shareholding in Smartfunding in addition to stake held by Abelco. FFG will provide marketing and technical assistance to Smartfunding to launch the Buy-Now- Pay-Later financing service for corporates.
Smartfunding is an existing investee company of FFG’s Sweden-listed subsidiary, Abelco. Abelco, via its subsidiary Fintech Asia Group, holds 58.8% of Smartfunding.
Smartfunding has been awarded by Singapore central bank, the Monetary Authority of Singapore (MAS), a Capital Market Services (CMS) license for the Dealing in Securities category. The CMS license grants Smartfunding a wide-range of regulatory abilities to conduct transactions in any investment instruments classified as securities under the Singapore Securities and Futures Act, including debt securities.
Smartfunding’s current business includes operating a peer-to-peer online lending platform that provides short to mid-term working capital loans to Small and Medium Businesses (SMBs) in Singapore and other international markets.
The expansion of Smartfunding’s business to include a Buy-Now-Pay-Later programme is a natural progression for the business and is in line with its scope of business.
Smartfunding’s BNPL Financing will allow corporations to apply on its website via a digital process, any procurement of equipment or services, for an amount of S$25,000 (A$26,000) up to S$1,000,000 (A$1,040,000), to be repaid in instalments over a 12 months or 24 months period at competitive interest rate.
The capital to finance the BNPL Financing will be provided by third-party investors (institutional and individual) onboarded on Smartfunding’s online lending platform. For example, if there are 50 corporations seeking BNPL Financing on the month of January, Smartfunding will design and launch a series of 50 debt instruments to be presented and funded by third-party investors on Smartfunding’s lending platform. Each BNPL Financing case will be presented as a unique debt instrument.
Investors are frequently onboarded onto Smartfunding’s lending platform with the objective of presenting them with the opportunities to participate in alternative investment instruments, made available digitally on Smartfunding’s platform. As such, the capital requirement for the BNPL Financing on Smartfunding’splatform will be satisfied by third-party investors, and not Smartfunding (nor FFG), similar to practices of the BNPL industry in other international markets.