Mocasa is a new, ambitious marketplace lending platform offering European investors exposure to Asian consumer and business loans. In this interview, we ask Mocasa CEO Claire Cheung about why Mocasa was launched, how investing works on the platform, how they handle risk, and much more. You can learn more about Mocasa in our in-depth review or by visiting the Mocasa platform page here on P2PMarketData.
The Mocasa Story
Mocasa is a newly launched platform that seeks to connect European investors with opportunities in some of the fast-developing markets in Southeast Asia and South Asia. The platform is also presented as the global fintech brand of Thor Group, the primary owner of Mocasa. Could you please tell us more about why Thor Group decided to launch Mocasa? Why did you choose the name Mocasa, and what does it signify?
Thor Group is a Singapore-based internet group committed to bringing first-class internet products to the global market with multiple product lines, including credit loans, mobile games, online social media, and e-commerce.
Thor Group has had successful operations in credit markets in several Asian countries since years ago. The cumulative number of borrowers has surpassed one million and the businesses are growing steadily. However, the group needs more capital to further grow the credit businesses. The credit businesses can provide excellent returns and we believe that these are exciting new investment opportunities for European investors. This is why the group has decided to launch Mocasa.
The word Mocasa is a combination of “Mo” for “Mobile” and “Casa”, meaning home in Spanish, signifying that Mocasa aims to become users’ warm home, a place that they can always turn to when it comes to financial services which are crucial and essential in daily life.
Mocasa Ownership Structure
As mentioned above, Mocasa is the global fintech brand of Thor Group. Is Thor Group the sole owner of the platform, or how is the ownership structure? Do you have ownership in the platform yourself?
Thor Group has 100% of ownership.
Mocasa Management Team
What is your own background, and how did you become interested in the marketplace lending industry? How did you become involved with Mocasa and Thor Group?
I have received higher education in France and have spent the first years of my career in Europe. I hold an engineering degree from Telecom Paris (Grande Ecole in France), which is now part of Institut Polytechnique de Paris, and have also followed a one-year curriculum of Digital Business Management in HEC Paris.
In my professional career, I have first worked in management consulting, based in Paris and working for multinational corporations and regulators in Europe, Asia, the Middle East, and Africa. After returning to China, I have held strategy and corporate development positions in listed companies such as Costa Cruises and Tuniu.com before joining Thor Group.
As head of investment and financing in Thor Group, I am very familiar with the business logic and financial situation of the group. It came to my mind to create a bridge between investors in developed countries who have cash and look for passive income and credit and start-up projects in Asia who need funds for further development. This shall create great value for both parties. The creation of Mocasa investment platform will also help the fintech business of the group to upgrade from a unilateral business to a bilateral business, which is a critical transformation of the group’s business model.
Who are the other management members, and what skills do you think are necessary to run a platform like Mocasa?
Other management members include product development director, technology director, and marketing director based in China and risk management head as well as operations head based in Europe.
I believe that the capability of developing a first-class product that the users will love is a key skill for running a successful investment platform. We will develop and improve our products constantly and will even bring some creative features to the product that users will not be experiencing on other platforms. Risk control is another key issue for the platform. We will only list on the platform assets that are selected with the highest level of due diligence and we will make every effort to ensure a robust risk control strategy at the group level.
Asian Loans to European Investors
Mocasa focuses on marketplace lending through loan originators that issue loans to consumers and businesses in Asia. Why did you choose to focus on this specific business model and market segment?
There are two considerations. The first and main consideration is that the marketplace lending model fits the group’s situation perfectly. Thor Group has multiple lending companies operating in different Asian countries and these lending companies can act as loan originators. The other consideration comes from a market perspective. Marketplace lending is one of the most popular financing types that European investors choose and represents the largest market share. New users who come to the platform of Mocasa would be very familiar and feel comfortable with this business model.
You currently have three loan originators listed on Mocasa: Philippine Cashtrout Lending Corporation, Microwish Pawnshop Services Company Limited, and Thunder Light Technology Limited. Do you plan to add more loan originators in the future?
Yes, we will soon add a fourth loan originator, SunLoan Lending Investors Corporation, another certified lending company in the Philippines. We will gradually add more loan originators and assets on the platform.
Investing on the Mocasa Marketplace
Could you briefly explain what type of investment products you offer at Mocasa?
Mocasa offers short-term and business loans for investors with an annual return rate from 11% to 15% with a 21-days to 720-days loan repayment range. All of the loans come with a 30-days buyback guarantee. We offer 2 strategies for investment, the ‘Balance’ and ‘Reinvest full amount’ strategy, which allow investors to choose either to reinvest the full principal and interest amount or to get all principal and interest settled to account balance after the investment is finished automatically.
Besides offering the 2 automatic investment strategies, Mocasa also has a general auto-invest strategy under which the amount in an investor's account balance will be automatically invested into available loans if a created portfolio’s target size is not fully used. Mocasa doesn’t provide a secondary market at this moment, however, investors are still able to sell their loans to the loan originator to increase their liquidity.
New investors on Mocasa are offered €5,000 in trial funds that can be used to create a portfolio and explore the platform. However, the interest made from the trial funds can be withdrawn or reinvested, which seems like a very attractive offer. Could you explain a little more about how this offer works? Are there any restrictions on the offer or limits to how much can be withdrawn?
The €5,000 trial funds is a free offer for exploring the Mocasa platform as a new investor. It is automatically credited to the user’s virtual account after signup. There’s no precondition in terms of using the trial funds to create a trial portfolio.
The trial funds will be invested for 7 days once it’s been used to create a portfolio. An investor will be entitled to withdraw or reinvest the interests generated by the trial funds under the condition that he or she invests €200 or more for 90 days. The €5,000 trial funds itself cannot be withdrawn or reinvested, whatsoever.
If I decide to place money at Mocasa and build a diversified portfolio, how much can I expect in net yearly return after losses and delayed payments?
The average annual return of loans is currently 13.4%. And all of the loans come with a 30-days buyback guarantee provided by the loan originators, which means investors won’t suffer losses of principal or interest caused by delayed payments or default.
How do you calculate your returns? What method do you use to decide when a loan must be written off and accounted as lost or with minimal chance of recovery? Do you use an objective or subjective way of deciding when to write off loans in the actual returns?
Mocasa calculates the interest of investment with this formula: (investor’s outstanding principal) * (loan’s annual return rate) / 365*(days of being invested). Suppose you invested €5,000 in a loan with a 15% annual return rate for 720 days on Mocasa, the interest you will get after the due date is 5,000 * 15% / 365 * 720 = €1,479.45.
Mocasa receives from loan originators desensitized data of all underlying loans through API. We constantly monitor the repayment status of each loan and can start the buyback process when the repayment is late for more than 30 days.
How Mocasa Handles Risk
How do you ensure that the loans listed on Mocasa are safe for investors to put money into?
Mocasa belongs to an international company, Thor Group, that has multiple strong business lines across the world. All of the loan originators on Mocasa are affiliated companies to Thor Group. Information and data of loan originators have been made completely transparent to Mocasa. Mocasa will only list assets that are selected with the highest level of due diligence and we will make every effort to ensure a robust risk control strategy at the group level.
From what I can see, a buyback guarantee protects most loans on Mocasa. Could you explain how your buyback guarantee works and how it affects the risk faced by investors?
A buyback guarantee is applied to all of the loans on Mocasa to minimize the investor’s risk. When repayment from the borrower is late for 30 days, Mocasa will start the buyback process on the 31st day after the due date. We will write off from the loan originator’s virtual account on Mocasa the buyback price and transfer the equivalent amount of virtual money to the investor’s virtual account immediately. The buyback price is equal to the total amount of the remaining principal amount the investor holds as well as the accrued interest at the time of exercising the buyback obligations.
If the unlikely event should occur that Mocasa goes out of business. What will happen to the investors’ money?
In case Mocasa becomes insolvent, all funds available on the investors’ virtual account shall be returned to the investors unless not allowed by applicable laws. Insolvency of Mocasa shall not affect the legal relations between the investor and the loan originator, and Mocasa shall take all the necessary steps so that a third party takes over the management of all claims arising from the Platform. What’s more, investors’ funds are kept in a separate account at a payment provider, and will not be mixed with the company’s own capital, which can highly secure the funds safety in case Mocasa becomes insolvent.
The Future of Marketplace Lending in Asia
The Covid-19 pandemic still has a great impact on many of the countries you operate in. How has this affected the launch of Mocasa?
The Covid-19 pandemic has not impacted the launch of Mocasa much.
Firstly, the pandemic has had quite a limited impact on the credit businesses in most of the countries where we operate. Take the Philippines for example. Although Covid-19 cases rose significantly earlier this year, restrictions of lockdown were not very strict and people were getting used to living with the disease. The credit businesses in the Philippines of the group have grown steadily throughout this year. Operations in Vietnam were impacted a bit more but are still quite manageable.
From August-September on, the number of new Covid-19 cases in Southeast Asia has significantly dropped. Most of the countries are opening up and people are returning to normal life. We have every reason to believe that the credit markets in Asia will get better and stronger.
What do you think the future of marketplace lending in Asia will look like? Which challenges do you see for the industry in the coming years?
I believe that the marketplace lending backed up by Asian assets will grow very fast in the future years. More and more assets will be listed on cross-border platforms like Mocasa and made available to European investors. Asia-Europe marketplace lending will have a much higher market share amongst all peer-to-peer lending and equity crowdfunding markets in Europe in the future.
The biggest challenge will be to manage the risks of assets in Asia and ensure compliance in both continents. This requires in-depth knowledge and experience in the credit markets in Asia, with preferably local business development, risk control, and compliance teams in Asia. This is also the key value proposition that Thor Group and Mocasa offer to European investors.
Another challenge is currency exchange risks. A platform like Mocasa will have to manage exchange fluctuations and risks between Euro and local currencies in Asia.
The future of Mocasa
Mocasa has a unique offer compared to many other marketplace lending platforms as it offers market exposure to fast-growing and high-yield markets in Asia. What are your strategy and goals for the coming years? As a relatively new platform, how do you plan to position yourself in the market?
As a new platform, we hope to earn trust from investors by being as transparent as possible, by providing better services to users such as timely response to users’ requests and VIP service programs, and by offering creative and user-friendly features such as trial funds.
Our goal for the coming years is to become one of the largest marketplace lending platforms in Europe and become the largest marketplace for Asian assets in Europe.
If we look ten years down the road and Mocasa no longer exists: What went wrong?
The fact that Mocasa has an Asian origin could be an advantage and unique positioning on the one hand, but it also makes it relatively harder for us to have the best understanding of users’ needs. The more we understand and satisfy the real needs of users, the stronger we will be. Mocasa strives to listen to users and meet users’ keenest needs. We are building our operation team including customer service in Europe and will stay close to our investors.
Thor Group has a long-term interest in developing an alternative investment platform in Europe and maybe later in other developed markets such as North America and Oceania. A lot of industries are growing very fast in Asia, and personal financial service is one of the fastest-growing sectors. Huge opportunities await us, accompanied by challenges. Mocasa is ready to sail further unwaveringly.