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Funding Societies crosses US$3 bil in SME financing, doubles down beyond financing to support SMEs’ needs

Digital News Asia

19 Apr 2023

Funding Societies announced it has achieved US$3 billion (RM13.4 billion) over more than 5 million transactions of business financing to small and medium-sized enterprises (SMEs) across Southeast Asia.

Funding Societies announced it has achieved US$3 billion (RM13.4 billion) over more than 5 million transactions of business financing to small and medium-sized enterprises (SMEs) across Southeast Asia.

In a statement, the SME digital finance platform said as it expands across five countries in Southeast Asia, almost 100,000 SMEs have benefited from access to financing.

It continues to support underserved SMEs via its range of short-term financing solutions while achieving an overall platform cohort default rate under 2%.

In Malaysia, it claims to have disbursed US$450.7 million (RM2 billion) in financing since 2017. In its move to empower SMEs, the company has begun offering solutions beyond lending, such as payments and collections.

[RM1 = US$0.239]

And since establishing its payments business, it claims to have tripled its Gross Transaction Value (GTV) year-on-year through its proprietary solution Elevate, and its integration of CardUp’s payments solutions for FY2022.

Kelvin Teo, co-founder & group CEO, Funding Societies | Modalku said 2022 was a big year for the company despite the uncertain macro environment.

“Committed to empowering SMEs in Southeast Asia, we have raised our Series C+; scaled in Thailand and Vietnam; deepened localised financing propositions; secured our first credit line from a global commercial bank HSBC with US$50 million, entered into payments with CardUp and investment into Bank Index, all because SMEs’ needs extend beyond financing.”

“While there are macro headwinds this year, we are optimistic to continue growing sustainably, as we did during Covid-19. We will continue to stay nimble, innovate, and scale up in financing, payments and other financial services – catering to various pain points of SMEs,” Teo said.

Meanwhile, Chai Kien Poon, country head, Funding Societies Malaysia was proud of the milestone in touching US$450.7 million disbursement within six years.

“In line with our commitment towards uplifting the local SMEs, we are looking to introduce new products this year, including extending our Islamic Financing offerings. We look towards forging new industry partnerships to enable us to deepen our reach to the underserved, creditworthy SMEs,” Chai said.

According to Funding Societies, another significant milestone was the acquisition of CardUp, a digital payments platform.

It said both entities are currently developing a unified digital finance platform for SMEs. The acquisition has also brought payments talent into Funding Societie. Together, the platform now covers Singapore, Indonesia, Malaysia, Thailand, and Vietnam; with operations in Hong Kong and India as well.

Additionally, Funding Societies introduced its business expense solution that comes with a credit line – Elevate, which enables SMEs to enjoy faster access to credit as their applications will be processed for approval from the first business day after submission.

Since its launch in Singapore, Funding Societies said it has served nearly 2,000 SMEs, with Elevate being their first corporate card. The firm is exploring to introduce Elevate in its other markets too.

Combining Elevate or other cards, Funding Societies said SMEs will be able to use their cards in places that do not accept cards, and facilitate collections from their customers.

In May 2022, Funding Societies introduced its first Shariah-compliant Trade Financing solution based on Commodity Murabahah via Tawarruq, allowing SMEs to access a credit line of up to US$225,000 at zero collateral.

The company said it is working to launch its Shariah-compliant micro and term financing this month, expanding its Shariah financing propositions across its product offerings, in line with its focus to grow its leadership in Islamic Finance.

On the investor side, the fintech platform introduced its Guaranteed Investment Notes (GIN) which provide investors with a return of up to 8% p.a. It said through GIN, investors can enjoy consistent principal and interest returns for their investment starting as low as US$22.50.

An appointed guaranteeing entity maintains the capital and cash reserve buffers to ensure investors are repaid timely when issuers are delinquent or default on payments, it added.

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