Kilde vs Chocolate Finance: A Comprehensive Comparison for Income-Focused Investors

Singaporean investors seeking monthly income have choices ranging from MAS-licensed alternative investments to high-yield cash accounts.

Kilde is known for private credit income investments in Singapore (targeting 11–15 % p.a. with collateralised bonds), whereas Chocolate Finance offers a flexible cash management solution (~3 % p.a.).

This side-by-side comparison covers their yields, security, fees, and liquidity.

TL;DR: The 5 Biggest Differences

1. Yield: Double-digit coupons (11–15 % p.a.) vs ~3 % p.a. returns
2. Asset backing: Secured private loans (with collateral) vs diversified bond funds (no specific collateral)
3. Payout frequency: Monthly fixed coupon payouts vs daily accrual of interest
4. Liquidity: Fixed terms (3–36 months) with limited early exit vs withdraw anytime (≈3-day processing)
5. Regulation & custody: MAS‑licensed (Kilde: CMS deal in securities) with DBS escrow vs MAS‑licensed (fund manager) with custodian accounts

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Comparison Table

Business Model & Underlying Assets

Kilde

Platform Type:

Private credit investment platform for accredited investors.

Business Model:

• Connects investors to high-yield loans issued by non-bank financial institutions (NBFIs).
• Investors purchase debentures that fund these loans.
• Kilde earns interest from NBFIs, then passes most of it (minus a small fee) to investors as monthly coupon income.

Underlying Assets:

1. Senior-secured loans backed by cash-generating receivables.
2. Assets typically consist of:
   
   • Consumer loan portfolios
   • SME loan portfolios
3. These are usually in emerging markets, offering 11–15% annual yields.

Risk Management & Licensing:

• Regulated by the Monetary Authority of Singapore (MAS).
• Deals undergo strict due diligence before being offered.

Chocolate Finance

Platform Type:

Cash management account model.

Business Model:

• Pools customer deposits into a portfolio of:
  - Short-term bonds
  - Money market funds
• Funds are lent to governments and corporations via highly liquid bonds.

Returns:

Approximately 3% per annum, derived from interest on the underlying securities.

Investment Approach:

• Managed by an MAS-regulated fund manager.
• Operates like an enhanced savings account.
• Investments include:
  - Globally selected investment-grade bond funds
  - Moderate duration risk added to improve returns

User Experience:

• Low-touch and diversified.
• Users deposit cash and earn a stable rate.
• Chocolate handles all fund investments behind the scenes.

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Income Predictability vs Volatility

Kilde: Predictable Fixed Income

Key Features:

• Offers fixed coupon rates (e.g. 12% p.a.) for each deal.
• Delivers steady monthly interest payouts directly to your account.
• Structured debt investments ensure contractually defined payments.

Income Characteristics:

• Little to no volatility in income, assuming borrowers pay on time.
• Provides a stable monthly income stream with no market price fluctuations.
• Functions similarly to traditional bond interest payments.
• Negligible day-to-day variation - passive income you can rely on (excluding default events).

Ideal For:

• Investors seeking predictable, passive monthly income.
• Those who prefer certainty over yield variability.

Chocolate Finance: Variable but Stable Returns

Key Features:

• Offers target rates (e.g. 3% p.a. on your first S$20k).
• Returns are not fixed, but actively managed through short-term bond investments.
• Users see daily balance growth from accrued interest.

Income Characteristics:

• Returns may fluctuate slightly day-to-day.
• Occasionally, interest could be zero or slightly negative if markets dip.
• Small variations average out over time to approach the advertised yield.

Top-Up Programme:

• If underlying funds underperform (up to S$50k), Chocolate may top up to maintain ~3% during a promotional period.
• If funds outperform, Chocolate keeps the excess up to a limit.
• Helps smooth short-term returns, but it is not a permanent guarantee.

Ideal For:

• Investors looking for a low-volatility cash management solution.
• Those who are comfortable with variable interest that compounds daily instead of fixed monthly coupons.

Key Point:

Chocolate offers stable but not fixed returns, while Kilde provides fixed, predictable monthly income.

Risk Management & Collateral Controls

Kilde: Capital Protection via Underwriting and Collateral

Vetting & Due Diligence:

• Only ~9% of potential deals pass Kilde’s strict due diligence process.
• Each borrower is thoroughly vetted before being listed on the platform.

Collateralisation:

1. Loans are secured by the borrower’s own loan receivables.
2. Average 1.6× collateral coverage (i.e. collateral value = ~160% of loan principal).
3. In case of default:
   
   • Kilde, as a senior secured creditor, enforces rights over the collateral.
   • The collateral pool (loan portfolio) can be managed or liquidated to recover funds.

Default History & Recovery:

• Maintained a 0% default rate since launch.
• All investors have received full principal and interest to date.

Risk Mitigation Strategies:

1. Diversification across:
   
   • Multiple borrowers
   • Various industries
   • Different regions
2. Continuous covenant monitoring ensures deal terms are followed.
3. Even in borrower distress, real assets back the investment.

Key Risk Note:

• Private credit carries risk - defaults are possible.
• Kilde’s structure aims to minimise loss severity and keep defaults rare.

Chocolate Finance: Portfolio Diversification and Market Risk Control

Investment Strategy:

1. Invests in high-quality bond funds, not individual loans.
2. Typical holdings:
   
   • Singapore Government bills
   • Blue-chip corporate bonds
3. No asset-level collateral per user; deposits are pooled and diversified.

Risk Types:

• Exposed to market risk and interest rate risk, not borrower default.
• Uses investment-grade bonds with short durations to minimise volatility.

Portfolio Management:

• Actively adjusted in response to interest rate changes and market shifts.
• Exposure to specific sectors or issuers is minimized through frequent rebalancing.

Liquidity & Withdrawals:

• Redemption support is provided through liquidity buffers.
• Instant withdrawals, initially enabled by pre-funding, were paused due to very high demand.

Capital Stability:

• No formal principal guarantee.
• Not covered by SDIC insurance (not a bank).
• However, capital is generally stable under normal conditions.

Performance History:

• So far, no customer losses have been reported.
• Target yields met or exceeded.
• Chocolate’s Top-Up Policy would have compensated for any underperformance (up to defined limits).

Risk Control Philosophy:

1. Relies on:
   
   • Diversification
   • Conservative asset selection
   • MAS regulatory oversight
2. Does not use specific collateral or deal covenants like Kilde.

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Regulatory Oversight & Custody

Kilde: Capital Markets Services Licence & Trustee-Based Custody

Regulatory Status:

• Licensed by the Monetary Authority of Singapore (MAS).
• Holds a Capital Markets Services (CMS) Licence for dealing in securities.
• Registered as an Exempt Financial Adviser.
• Permitted to serve only accredited and institutional investors.

Custody & Client Fund Handling:

• Investor funds are held in a segregated client escrow account at DBS Bank.
• Administered by an independent trustee: Perpetual Asia.
• Kilde does not directly hold or control investor money.
• Every transfer is verified by the trustee against platform records.

Investor Protection Measures:

1. If Kilde ceases operations:
   
   • Client funds remain secure in the escrow account.
   • Investments are wound down, and proceeds are returned to investors first.
2. The structure is comparable to that of law firms or crowdfunding platforms in terms of fund handling.
3. Investors benefit from:
   
   • Regulatory audits
   • Capital requirements
   • Operational compliance

Summary:

Investors enjoy strong legal safeguards and clear fund management.

These are supported by high investor protection standards and trust-based custody.

Chocolate Finance: Licensed Fund Management & Segregated Custodian Accounts

Regulatory Status:

• Chocfin Pte. Ltd. operates under a CMS license from MAS.
• It is classified as a legitimate financial institution.
• It has authorization to conduct fund management activities.
• It is not solely a fintech startup.

Custody & Fund Management:

• User funds are held in segregated custody accounts with MAS-licensed institutions.
• A custodian bank or trust holds the assets on behalf of customers.
• Funds are separated from Chocolate’s corporate accounts.

Risk Management & Limitations:

• If Chocolate were to shut down, customers can still claim their invested assets.
• Not covered by SDIC insurance (Chocolate is not a bank).
• MAS oversight ensures proper conduct, but does not remove investment risks.

Summary:

Custody and structure protect investors from operational failure.

Chocolate’s retail-friendly licence allows it to serve public investors, with risk disclosures in place.

Comparison table

Key Takeaway:

Kilde and Chocolate Finance both operate under robust MAS oversight, safeguarding investor assets through the use of third-party custodians.

Kilde specializes in structured private deals for accredited investors, utilizing trustee-held escrow for added security.

Chocolate Finance, on the other hand, serves retail investors, managing their fund holdings through custodians.

Fees & Net-of-Fee Return

Kilde: Transparent, Net-Yield Model

Fee Structure:

• Charges a modest platform fee of ~0.5% p.a..
• No upfront fees, no account funding fees, and no transaction fees on:
  - Joining
  - Investing
  - Coupon redemptions

How Fees Are Applied:

• Yields shown to investors are net of platform fees.

Example:
If you see 15% yield, that’s after Kilde’s fee.
The borrower might pay ~15.5%, and you receive the net 15%.

• Kilde earns from the interest rate spread between borrower and investor.

Cost Efficiency:

• Kilde streamlines investing by removing intermediaries and reducing costs.
• More interest is passed to investors compared to traditional funds.

Return Characteristics:

• Published returns of 11–15% p.a. are after fees.
• Returns are quoted on a simple annual basis.
• Actual IRR may be higher if monthly coupons are reinvested (compounding effect).

Chocolate Finance: No Fees, Target-Based Performance Model

Fee Structure:

• No account fees, no subscription fees, no withdrawal fees.
• Chocolate earns a performance fee only if returns exceed the target rate.

Performance Fee Mechanics:

1. If underlying funds outperform the target:
   
   • Chocolate keeps a portion of the excess (e.g. up to 2% above target).
   • Example: If funds earn 5%, and the target is 3%, the user gets 3%, and Chocolate keeps up to 2%.
2. If funds earn exactly the target, chocolate takes no additional fee.
3. During the promotional period, if returns do not meet the target, Chocolate Finance will absorb the loss and cover the difference, guaranteeing the promised yield.

Fund-Level Fees:

• Bond funds incur their own management fees, typically ranging from 0.2% to 0.5%.
• These are incorporated into the fund's performance and are not direct user charges.

User Experience:

• Dashboard yield is net of all fees.
• You always receive the full target rate first.
• Chocolate only earns after you’ve made your return.

Comparison Note:

DIY investors in similar funds might avoid the performance cut but lose top-up protection and platform convenience.

Comparison Summary

Key Takeaway:

Kilde provides high-yield net returns with a small, transparent fee already deducted.

Chocolate offers targeted returns with no surprise deductions, only earning if the portfolio outperforms.

Both models are cost-efficient and align investor and platform interests.

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Liquidity & Early Exit Mechanics

Kilde: Term-Based Investments with Limited Early Redemption

Investment Duration:

• Deals typically range from 3 to 36 months.
• Investors are expected to stay invested until maturity to receive principal repayment.

Early Redemption Options:

1. Many deals include early redemption windows every 3–6 months.
   
   • Usually occur quarterly.
   • Redemption is often penalty-free, returning the remaining principal at face value.
2. Redemption terms vary:
   
   • Some deals allow partial redemptions.
   • Others may require finding a replacement investor.

Liquidity Limitations:

• No on-demand withdrawals outside designated redemption windows.
• No secondary market exists on the platform for selling debentures instantly.
• Principal remains locked until:
  - Maturity, or
  - Next redemption window

Interest Payouts:

Monthly coupon payments are fully liquid:

• Deposited into your account.
• Can be withdrawn or reinvested anytime.

Investor Profile:

• Best suited for those willing to lock capital for a fixed term.
• Trade-off: Higher returns vs. lower liquidity.

Analogy:

Think of Kilde’s deals like fixed-term bonds:

• Principal is committed for a set duration.
• Interest is paid out regularly.

Chocolate Finance: High Liquidity, Flexible Withdrawals

Withdrawal Flexibility:

• No lock-in periods.
• Withdraw any amount at any time via the app.

Processing Time:

1. Withdrawals up to S$20k/day are usually instant or same-day.
2. Larger or off-peak withdrawals are processed in:
   
   • Typically 3–6 business days (often ~3 days).
   • Time is needed to sell fund units and transfer cash.

Withdrawal Conditions:

• No penalties or fees, even for short-term investments.
• If you withdraw after just a few days, you still keep the accrued interest.

Interest Mechanics:

• Interest accrues daily and compounds.
• Not paid out monthly; instead, it accumulates in your balance.
• When you withdraw, you receive principal + accrued interest.

Use Case:

• Ideal as a cash parking tool or emergency fund.
• Access and liquidity are prioritised over yield maximisation.

Analogy:

Chocolate functions like a savings account with short withdrawal delays, offering flexibility and convenience.

Comparison Summary

Key Takeaway:

Kilde is suitable for funds you can set aside, offering higher yields with reduced liquidity.

Chocolate Finance provides near-instant access, making it ideal for short-term or emergency liquidity needs.

Your choice should be based on your liquidity preferences and time horizon.

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Ideal Investor Profile

Kilde: For Accredited Investors Seeking High-Yield Income

Target Investor Type:

• Accredited Investors who meet wealth/income criteria in Singapore.
• Individuals comfortable with medium to long-term commitments.
• Investors with a higher risk appetite, particularly for credit risk, mitigated by collateral.

Investment Goals & Preferences:

1. Seeking 11–15% annual returns.
2. Value monthly passive income - ideal for those supplementing cash flow or retirement planning.
3. Willing to trade liquidity for yield.
4. Likely to have:
   
   • An existing portfolio of traditional assets.
   • An interest in diversification via private credit.

Typical Profile:

• High-net-worth individuals (HNWIs).
• Family offices.
• Experienced investors familiar with MAS-licensed platforms and fintech interfaces.
• Those looking for income-generating alternatives beyond banks and T-bills.

Use Case Comparison:

• Considered alongside private bonds, peer-to-peer lending, and other alternative fixed income.
• Kilde’s secured loan structure and institutional-grade processes differentiate it from competitors.

Key Attributes:

• Invests for 6–36 months.
• Accepts illiquidity and some credit risk for enhanced yield.
• Seeks trustworthy, regulated income opportunities.

Chocolate Finance: For Broad, Conservative, and Flexible Investors

Target Investor Type:

• Retail investors, including non-accredited users.
• Young professionals, tech-savvy users, and corporate treasury managers.
• Anyone with spare cash who wants better returns than banks without locking funds.

Investment Goals & Preferences:

1. Prioritises capital preservation and liquidity.
2. Suitable for:
   
   • Emergency funds
   • Short-term savings goals
   • Day-to-day cash earning passive returns

Typical Profile:

1. Individuals comparing Chocolate with:
   
   • Bank savings accounts
   • Fixed deposits
   • T-bills or money market funds
2. Prefer ease of use, with:
   
   • No account minimums
   • No complex terms
   • Quick access to cash

User Experience Highlights:

• App-driven, frictionless onboarding.
• Offers a ~3% return, net of fees, with no conditions.
• Appeals to those who want to “make every dollar work” without compromising flexibility.

Key Attributes:

• Accepts ultra-low risk with minor market fluctuations.
• Understands it’s an investment (not SDIC-insured) but trusts MAS regulation.
• Treats Chocolate as a parking solution - not for high returns, but for efficient cash use.

Comparison Summary

Key Takeaway:

Kilde is ideal for those ready to commit capital for higher returns and meet accredited investor thresholds.

Chocolate Finance serves those seeking safe, liquid, no-fuss returns, offering accessibility and stability for everyday cash.

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Why Singapore Accredited Investors Choose Kilde

High-Yield, Passive Monthly Income

• Target yield of 11–15% p.a. - far surpassing traditional deposits and bond funds.
• Income is delivered through carefully vetted, senior-secured bonds.
• Structured for regular monthly payouts, ideal for building stable passive income.

Robust Risk Controls & Institutional-Grade Security

• Every deal undergoes stringent due diligence.
• Loans are senior-secured and backed by real assets, enhancing investor protection.
• 0% default rate to date - a strong indicator of effective risk management.

Trusted Custody & Regulatory Oversight

• Investor funds are held in escrow accounts at DBS Bank.
• Escrow accounts are administered by a licensed, independent trustee.
• Operates under a full Capital Markets Services (CMS) Licence from the Monetary Authority of Singapore (MAS).

A Smart Choice for Accredited Investors

1. Ideal for investors seeking:
   
   • Higher yields
   • Monthly passive income
   • Diversification through private credit
2. Designed to meet the needs of accredited investors who value security and returns.

Ready to Elevate Your Income Strategy?

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