Credit Culture raises $29m from Malaysian RCE Capital to compete with personal bank loans

Credit Culture receives S$40 million funding boost.

Singaporean money-lending startup Credit Culture announced a S$40 million (US$29.4 million) funding round from Malaysian financing firm RCE Capital to advance the startup’s ambition to provide an alternative to traditional banks’ personal loan services.

The deal involves RCE Capital buying bonds issued by Credit Culture, while the bonds are secured against the firm’s loan receivables, so it’s not a conventional venture capital investment.

Credit Culture hasn’t launched yet, but it is one of six entities chosen by Singapore’s Ministry of Law to build new business models for the city-state’s personal lending market. The firm is set to launch its platform in Singapore this year, offering loans with attractive rates. It will tap into Singapore’s Myinfo, a government-affiliated data service aiming to simplify the city-state’s online transactions, on top of using its own proprietary credit scoring technology.

The company claims to only charge its borrowers only up to 1% monthly interests. Singapore’s Moneylending Act mandates that monthly interest rates cannot exceed 4%.

In a recent interview with KrASIA, Credit Culture’s founder Edmund Sim said an efficient credit scoring system that pulls data from credible sources like Myinfo can make the entire loan process leaner, faster, and cheaper. By passing off these cost-savings to borrowers, Credit Culture is then able to lend to an untapped pool in Singapore: those who earn less than S$20,000 per annum.

More importantly, making informed lending decisions will become the norm at Credit Culture. All the fees and interest payables to Credit Culture are more transparent than traditional banks; Borrowers can log in online anytime to view their amortisation schedules.

There will be no early repayment fees but also no additional default fees when borrowers can’t pay on time. The startup seeks to provide a conducive environment for borrowers to manage their repayments with no additional stress; early repayment is encouraged to save on interest payments.

That said, Singapore’s personal loans market has a long list of competitors. The other 5 fintech players who also received the same Ministry of Law license are IFS Capital, Minterest Holdings Pte Ltd, Quick Credit Pte Ltd, Xingang Investment Pte Ltd, and Credit Twenty-One.

Editor: Ben Jiang and Nadine Freischlad