Beehive has become the first peer to peer lending platform to set up offices in the Dubai International Financial Centre (DIFC) and become officially authorised and regulated by the Dubai Financial Services Authority (DFSA).
The new regulation is a first for the region and could catalyse growth of the fintech industry, says Beehive. Not only will it ensure clear governance for fintech businesses but will also provide added protection and peace of mind for peer to peer retail investors. Its introduction is particularly timely as peer to peer lending, is becoming an increasingly important route for small and medium enterprises (SMEs) to access finance.
Beehive was launched in Dubai in 2014 by serial entrepreneur, Craig Moore, aided by Rick Pudner, former Group CEO of Emirates NBD. Read an earlier interview Craig Moore gave P2P-Banking.com. Craig Moore, now said: “We’re delighted to be regulated by the DFSA. This regulation reinforces Beehive as one of the fintech leaders in the region and we feel this greatly expands the opportunity to further help SMEs and the wider economy.” Continue reading →
Beehive is the first and only P2P financing platform in the UAE (United Arab Emirates). Otherwise known as marketplace lending, peer-to-peer finance is the practice of lending money to unrelated individuals, or “peers”, without going through a traditional financial intermediary such as a bank or other traditional financial institution. Beehive bridges a significant funding gap that currently exists in the UAE market. Our platform applies the innovative technology of crowdfunding to eliminate the cost and complexity of conventional finance. Businesses bypass conventional intermediaries and receive financing directly from the crowd. This enables them to get faster access to lower cost finance, while investors get better returns. Beehive is a facilitator that enables businesses to secure the funding they need by creating the organizational framework and infrastructure required for community and financial support to materialize.
What are the three main advantages for investors?
The three main advantages for investors are:
No Barrier to Entry: Individual investors can invest from as little as AED 100 into each business listed on the platform and receive monthly repayments currently averaging 12% per annum with reinvested returns. Investors get money transferred into their account in as little as two days.
Diverse Portfolio: By investing on the Beehive platform, investors can diversify their risk across a number of products offered to a variety of companies operating across diverse sectors, with new companies listing on the platform every week. They are able to directly invest in a business they believe in. Investors are also able to buy or sell their finance parts to other investors on the platform through Beehive’s secondary market. This gives investors access to a market place where they can trade finance parts and allows greater access to liquidity and diversification.
Sharia Compliant Structure: Beehive allows investors to ethically invest in some of the most innovative SMEs in the UAE. Beehive supports Dubai’s ambition to be a Global Financial Capital with its innovative Sharia-compliant platform, which helps Islamic finance customers to achieve their financial goals in a more ethical structure, and helps compliant SMEs tap sources of Islamic finance liquidity. Beehive was certified by the Shariyah Review Bureau (SRB) as a Sharia-compliant P2P finance platform in September 2015, making it the first P2P platform in the world to independently confirm its processes are compliant with Sharia principles.
What are the three main advantages for borrowers?
The three main advantages for borrowers are:
Cost of finance: The platform offers considerable savings to businesses that need it: Businesses using Beehive save on average 30% on their financing costs. The average bank borrowing rate (unsecured) for SMEs in the UAE is over 18%, often much higher. Because investors compete for rates in a reverse auction process, business receive the lowest possible average rate from investors.
Time to finance: The Beehive online marketplace facilitates faster, more flexible funding, with companies typically getting a decision on their finance requests in 3 days. The application process is completed online, and businesses receive funding in 14 days or less.
Invoice Financing: Beehive’s SME invoice financing tool is designed to serve SMEs and help them manage their cashflows by closing the gap between the issue of an invoice and the receipt of actual payment. By unlocking the value of their accounts-receivable, they are able to tackle the dual challenges of rising inflation and late payments. These products give SMEs more options to plug invoice gaps, giving them greater control over their business and finances, and thus a greater opportunity for security and growth.
What ROI can investors expect?
The average return for investors is 12% per annum with reinvested returns
Please tell me more about Islamic Finance and Sharia Compliance. Is that a main factor for attracting clients?
One of the things we are very proud of is receiving our Sharia Certification. Globally we’re the first platform to be certified sharia compliant. It was our plan from the beginning to make a sharia P2P platform, because it hadn’t been done before and it would open a new asset class to Islamic investors. About 80-90% of businesses on the platform are Sharia compliant. What we find is that if the listing is sharia compliant, then investors will engage with the business whether they are conventional or Islamic, so it is a very attractive feature for both investors and businesses across the board.
How did you start Beehive? Is the company funded with venture capital?
Beehive has so far received two rounds of external funding in addition to founding investment.
Is the technical platform self-developed?
All the technology on the Beehive platform has been developed using in-house capabilities. Our in-house IT development, design and creative teams allow us to be agile and responsive to market needs. Continue reading →