Hong Kong fund raises HK$200m in loans for crowd funding platform MoneySQ

An asset management firm has raised HK$200 million from professional investors to be used as loans through Hong Kong’s first peer-to-peer crowd funding lender MoneySQ.com.

The Bridgeway Prime Fund raised the sum over three months from professional investors to lend through MoneySQ.com, as current regulations prevent other individuals from taking part in peer-to-peer lending.

Earlier this year, a report by the Hong Kong government’s Steering Group on Financial Technologies said peer-to-peer lending and equity crowd funding targeting professional investors “may benefit from certain exemptions”.

“Most of the [investors] we have contacted are still taking a wait and see approach. They want to see if this works out, they want to see if this is legal,” said Bridgeway founder Edwin Lee. “They want to see the result from MoneySQ or other platforms to see if the borrowers really do pay it back.”

Lee said the Securities and Futures Commission asked MoneySQ.com to change its description from a peer-to-peer lender because it did not facilitate loans directly between individual investors and individual borrowers. Instead, the company opted for the crowd funding description as it lends indirectly from a pool of funds.

Crowd funding and peer-to-peer lending in Hong Kong fall under the Securities and Futures Ordinance as well as the Companies (Winding Up and Miscellaneous Provisions) Ordinance.

Trust in peer-to-peer lending was hit after some of them, including the high profile Ezubao in mainland China, turned out to be alleged Ponzi schemes.