News Straits Times
3 Jan 2024
Funding Societies Malaysia has secured investments from Khazanah Nasional Bhd and CGC Digital Sdn Bhd to expand coverage in Malaysia beyond major cities with a target of serving more than 25,000 micro, small, medium enterprises (MSMEs) by end of 2025
Funding Societies Malaysia has secured investments from Khazanah Nasional Bhd and CGC Digital Sdn Bhd to expand coverage in Malaysia beyond major cities with a target of serving more than 25,000 micro, small, medium enterprises (MSMEs) by end of 2025.
Funding Societies is a regional financial technology (FinTech) company that provides financing toMSMEs, especially micro and small businesses currently unserved by existing financial institutions.
With the aim of addressing a RM90 billion (US$19 billion) funding gap for MSMEs, the fintech company plans to expand its coverage beyond Kuala Lumpur, Selangor, Penang, and Johor in Malaysia.
By the end of 2025, it targets to serve more than 25,000 MSMEs across Malaysia, thereby improving MSME's access to financing, growth, and scalability while fostering job creation and income development for those employed by these businesses.
Funding Societies co-founder and group chief executive officer Kelvin Teo said the investment from Khazanah and CGC Digital is a testament to their commitment towards extending credit to reach more underserved MSMEs.
"While MSMEs represent 97 per cent of business establishments in Malaysia and contribute 38 per cent to the gross domestic product (GDP), this group still faces significant challenges in obtaining credit, as evidenced by the RM90 billion financing gap in Malaysia."This is where Funding Societies seeks to step in by serving the region's MSMEs' cash management challenges and needs with our extensive reach and broad range of short-term financing solutions," he emphasised.
Khazanah Nasional's investment is part of its Dana Impak mandate, aligns with the Advancing Malaysia strategy, supporting MSMEs' access to financing for socio-economic growth in underserved communities.
The joint effort with CGC Digital aims to enhance financial inclusion through innovative digital guarantee products, addressing challenges for small businesses.
This partnership will provide long-term financing solutions for Malaysian MSMEs which leverage a digital-first approach for broader and more affordable access.
"CGC Digital sees this investment as a strategic win for Malaysian MSMEs, we seek to push the envelope by developing a suite of innovative digital guarantee products for thin-file MSMEs that can be offered together with Funding Societies' financing products to increase their chance of obtaining much-needed financing," said CGC Digital chief executive officer Yushida Husin.
Funding Societies | Modalku is the largest unified SME digital finance platform in Southeast Asia. It is registered with the Securities Commission Malaysia (SC), as well as licensed in Singapore, Indonesia, and Thailand, and operates in Vietnam.
It is backed by SoftBank Vision Fund 2, SoftBank Ventures Asia, and Sequoia Capital India amongst others.
Original Publication: https://www.nst.com.my/business/corporate/2024/01/996826/funding-societies-secures-investment-khazanah-nasional-and-cgc