Singapore is a relatively safe market, with low bad debt ratios as confirmed in a statement by ASME. Even so, we do not take things for granted. We ensure that all loan applications go through a stringent credit assessment process (refer to “How do you assess the creditworthiness of SMEs” FAQ for details) and we make our best effort to assess creditworthiness of SMEs, their owners, and directors. After loan disbursal, we continue to monitor the SMEs and remind our SMEs every month to ensure timely repayment.
However, default is a risk we cannot eliminate completely. Hence, as is the case with most investments, investors have to bear the risk of default, if all precautions fail. As investors of many loans, we share the same risk with you.
Furthermore, if you are a foreign investor, you may experience some foreign exchange risks, though it is safe to say that the Singapore Dollar has been a relatively stable currency for investment.