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Our P2P Loan Platform is a win-win Situation for Lenders and Borrowers

Gregor Gregersen, Silver Bullion Pte Ltd

Gregor Gregersen shared the benefits of their P2P loan platform and his expectation of emerging bullion market in Singapore with Bullion Bulletin. He also commented on the current status of Singapore gold market from investment perspective.  

1) Bullion Secured peer-to-peer platform. What does it stand for and how bullion owners or lenders get benefited? Please write in details.

Customers who store gold and silver with us are able to obtain a loan using their precious metals as collateral. It gives owners of gold and silver the option to unlock capital without having the need to sell their bullion. For example, if a customer is storing USD10,000 worth of gold in our vault, he is able to request for a USD5,000 loan on our bullion secured P2P loan platform. As you can see, each loan on our platform would have 200% collateral to loan value. Should the collateral to loan value falls to 125%, the borrower will receive a margin call from Silver Bullion to top up the collateral. If the value falls further to 110%, the loan is closed and the collateral liquidated to pay the lender.

Lenders with available funds are able to see borrowers’ requests on our platform and decide which loans to take up. Alternatively, lenders can also list their lending offers on our platform. Loans on our platform have tenures ranging from 1, 6, 12 and 24 months.

Both borrowers and lenders are able to set their own interest rates, desired loan tenure and the amount to borrow/lend. When there is a match between a borrowing request and a lending offer, a loan contract is formed.

Our bullion secured P2P loan platform is very safe. Even in the event if the borrower is late in repayment, we have a sweeper fund that will ensure that the lender receives his funds on time. The platform has matched more than S$27m across 1,000 loans. There are zero defaults. Lenders have absolute peace of mind lending their funds. Borrowers sleep well because their physical gold and silver are stored in our vault, called the Safe House, with full insurance. We have an uncommonly comprehensive class of insurance at our vault which also insures against inside jobs and mysterious disappearance. Right now, bullion stored in our vault is insured for a maximum of SGD 300 million for any one loss.

It’s a win-win situation for lenders and borrowers.

2) What I observed, only LBMA accredited refinery bars or legal tenders could be transferred to  your vault. Is this for maintaining highest bullion standards with zero risk? Elaborate how it works for clients.

We accept bullion bars and coins produced by LBMA accredited refineries because this accreditation is one of the criteria for bullion to be exempted from the 7 percent Goods and Services Tax(GST) in Singapore. For our international customers who store gold and silver with us, not needing to pay the GST can be further savings for them. This distinction also benefits our customers since such bullion are very liquid and easily resold given that they are internationally recognised brands. It does strengthen our company’s value proposition: store your wealth in a safe asset (physical gold and silver) in a safe location (our vault) within a safe jurisdiction (Singapore).

3) How full proof is your authentication tests that bars coming for storage are genuine?

As one of the pioneer bullion dealers in Singapore, we have a close business relationship with the largest international refineries and mints. Our bullion products are purchased directly from these suppliers. Silver Bullion has delivered more than 8 million ounces of precious metals since the start of the company and our business is still growing. We always inform our customers that their first defence against counterfeit bullion is to buy from a trustworthy source.

We do accept bullion that is not bought from us for storage at our vault. However, the authentication lab at our vault(The Safe House) conducts comprehensive tests on such bullion that are transferred to us from external sources. Beating counterfeit bullion requires our staff to study the material properties of precious metals. No one element has exactly the same material properties. Therefore, we use multi-faceted tests to ensure that the material properties of the precious metals are authenticated. Examples include density tests, ultrasound, X-ray spectrometer and electrical conductivity measurement. This would pretty much be the most rigorous authentication for non-destructive bullion testing.

4) As per your estimate, how Singapore Bullion market is evolving? What is your growth expectation?

Silver Bullion was the first bullion dealer in Singapore to offer the online purchase of bullion bars and coins with live prices when we first started in 2009. Those were the early beginnings of the Singapore bullion retail market. Silver bars and coins were very new to the retail market then. Since then, we have seen growing numbers of local and foreign customers buy and also store with us. Today, customers expect Singapore dealers to provide live pricing and are accustomed to placing bullion orders online. With a myriad of resources on precious metals on the Internet, we are also seeing more customers coming to us with a better understanding that buying physical gold and silver preserves purchasing power.

With the downward pressure on precious metals prices in recent years, I see the road ahead for the industry to be bumpy and mostly driven by external factors. The most important factor is people's own collective assessment of how they see their future. When markets rally and the future is perceived to be rosy, people chase yields and rush into equities and real estate. This is the type of market we are seeing in the short term which results in stagnating sales of bullion. Once people see financial storm clouds ahead, I expect them to switch back into precious metals. We will then see growth in the bullion industry go to a new level.

However, it is very difficult to make any predictions on the timing of when this switch will happen.

5) Are you looking to expand your business to other Asean countries?

We have operations in Malaysia but our primary business and storage facilities are, and will continue to be, in Singapore. This is because of the tax free status of bullion and the regulatory transparency the island nation has. Singapore is also an ideal jurisdiction for bullion storage since it is a very safe country with laws that strongly enforce property ownership. In addition, it has an open economy that is pro-business. I do not see a better place for our business at this moment.

About Gregor Gregersen

Gregor Gregersen is the founder and CEO of Silver Bullion Pte Ltd and its subsidiary, the Safe House SG Pte Ltd. As CEO of Silver Bullion, Gregor leads the team to ensure that all legal, jurisdictional, counterparty, insurance, authentication and physical security issues are addressed so as to provide bullion owners the worldwide safest place to store silver and gold.

 

Prior to founding Silver Bullion Gregor was a Senior Data Architect for Commerzbank AG and a Senior Business Intelligence Consultant for major MNCs. He holds a plethora of programming and project management certifications as well as US University degrees in Finance, Economics and Information Technology.

 

 

 

 

 

 

 

 

 

 

Disclaimer: Views are personal and not the views of the publisher.