KUALA LUMPUR, 20 January 2021 – Funding Societies Malaysia, the largest SME digital financing platform in Southeast Asia, announced that it has achieved RM1 billion disbursement in business financing across more than 17,000 financing deals, directly supporting creditworthy underserved micro, small and medium enterprises (MSME) across the nation. This milestone comes as the platform enters its fifth year of operations in the country.
Learning from the challenges and uncertainties it faced in the past two years, the platform was in a better position to react and to adjust its business model and risk underwriting, resulting in 100% growth of financing deals in 2021 compared to the previous year, while maintaining a default rate of around 3%.
Funding Societies has over the years championed SME digital financing with over 60% market share via tailored financing solutions befitting the varied business needs of SMEs. With a fully online onboarding process, the platform addresses typical challenges faced by SMEs when obtaining financing solutions including collateral requirement, physical documentation submission and lengthy processes.
Commenting on the milestone, Wong Kah Meng, Co-founder and Chief Executive Officer of Funding Societies Malaysia, said, “The pandemic has paved a new era of digital inclusion. This simultaneously allows us to scale further in reaching out to more of these creditworthy MSMEs, in line with their increased awareness on digital financing platforms. This RM1 billion disbursement milestone is a reflection of the thousands of underserved creditworthy SMEs we have supported over the years, not just in Malaysia, but also across Southeast Asia.”
Its inaugural regional impact study released late last year which surveyed the platform's impact on Singapore's, Malaysia's, and Indonesia's economies found that 72% of the respondents said their revenues would decrease if not for Funding Societies' business financing. Meanwhile, 84% of the surveyed businesses had used the financing as working capital to pay for overheads, inventory, and business equipment, which were all crucial in their efforts to sustain operations.
Funding Societies also fared well in its investors segment. Although returns on investments have taken a hit across most asset-class, investments in digital financing platforms continue to hold ground. The platform has on-boarded more than 50,000 investors to-date, a testament of the trust by investors. It has also introduced several new investment products within the last year to cater for investors actively seeking to diversify their portfolio.
Funding Societies remains bullish of its growth trajectory this year. “Our achievement is especially meaningful considering the past two years have been anything but normal. However, there is still a lot to be done to improve access to financing for MSMEs. Awareness and collaborations are key to our growth and to this end, we look forward to more fruitful partnerships with the government as well as industry partners to widen our reach. Based on our forecast, we look to disburse more than RM500 million in financing this year, with the strong support from all our stakeholders,” concluded Wong.
By providing equal access to financing for MSMEs, Funding Societies aims to boost the economy post-pandemic, by making available various financing products, schemes, and initiatives for the MSMEs who are the backbone of Malaysia’s economy. Regionally, the platform has reached RM8.5 billion total financing disbursement as of January.
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Funding Societies is a SME Digital Financing Platform registered with Securities Commission Malaysia. It does not fall under the jurisdiction of Bank Negara Malaysia. Therefore, financing products of Funding Societies should not be constructed as business loan, SME loan, micro loan, term loan or any other loans offered by banks in Malaysia and it is to be deemed as an investment note as defined in the Guidelines on Recognised Markets.
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