Why More Malaysians Are Turning to P2P Financing for Passive Income
In the search for smarter, more accessible investment options, Malaysians are increasingly turning to Peer-to-Peer (P2P) financing — not just for diversification, but as a reliable source of passive income.
With low interest rates on fixed deposits and the volatility of stock and crypto markets, P2P financing offers a middle ground: steady returns, controlled risk, and meaningful impact by supporting local businesses.
Here’s why this alternative investment class is gaining traction.
What Is P2P Financing?
P2P financing is a digital funding model where individuals or institutions finance businesses directly via online platforms like CapBay. In return, investors earn profit (or interest) from repayments — often at higher rates than traditional savings or fixed income instruments.
P2P platforms act as facilitators, conducting risk assessments, matching financiers with creditworthy businesses, and managing the repayment process.
1. Attractive, Stable Returns
One of the top reasons Malaysians are shifting toward P2P financing is its competitive returns. While savings accounts offer ~2–3% annually, P2P financing can yield returns between 6% and 10%, depending on the product and risk profile.
With platforms like CapBay, where the default rate is exceptionally low (below 0.1%), investors benefit from steady and predictable income flows, ideal for long-term wealth building.
2. Lower Barriers to Entry
Unlike property or private equity investments, you don’t need tens of thousands of ringgit to get started. With minimum investment amounts as low as RM100, P2P financing is accessible to young professionals, retirees, and everyday investors looking to grow their savings.
This affordability has made it a popular entry point for Malaysians exploring alternative investments.
3. Monthly Passive Income
Unlike stocks, which may not pay dividends regularly, or FDs that only mature at the end of a term, many P2P financing opportunities (especially invoice and supply chain financing) offer monthly repayments of both principal and profit.
This regular cash flow is ideal for:
- Supplementing retirement income
- Reinvesting to compound returns
- Supporting short-term savings goals
4. Diversification Beyond Traditional Assets
With growing uncertainty in the global economy, investors are looking beyond traditional asset classes. P2P financing offers low correlation to stock market fluctuations, making it a powerful tool for portfolio diversification.
By financing across multiple notes and businesses, you can also spread risk and maintain a balanced portfolio.
5. Shariah-Compliant Options Available
For investors seeking values-aligned opportunities, platforms like CapBay offer Shariah-compliant P2P financing products, giving Muslims in Malaysia a structured way to grow their capital ethically.
This is especially relevant as demand for Islamic finance continues to rise both locally and globally.
6. Making a Real Impact
Perhaps the most unique aspect of P2P financing is the social impact. Your investment doesn’t just grow your wealth — it directly helps Malaysian SMEs secure funding for:
- Fulfilling large contracts
- Buying inventory or raw materials
- Managing cash flow during long payment terms
This means your money works for you and the economy.
The Bottom Line
As Malaysians grow more financially savvy, P2P financing is proving to be a practical, impactful, and profitable investment option. Whether you’re planning for retirement, building a secondary income stream, or simply diversifying your portfolio — now may be the time to consider adding P2P financing to your strategy.
Your capital can work harder — and do more good — when it’s powering real businesses.
Interested to learn more about our P2P Financing Platform?
*The information provided in this article is based on the current tax laws and regulations at the time of publication. As tax laws and deadlines may change, it is advisable to consult with the Inland Revenue Board of Malaysia (LHDN) or a professional tax advisor for the most up-to-date and accurate information regarding your specific circumstances.
