Bridging the funding gap: Boost empowers thousands of small businesses with their first loans

• Shariah-compliant capital by Boost Credit, helps MSMEs access right financing
• Kongsi Klub lets members earn extra cash while assisting local businesses

After the transition of Covid-19 to its endemic phase in Malaysia, the country was faced with another catastrophe, mainly towards MSMEs (micro SMEs), with the rise of cost for food and other supplies. Without a doubt, this has directly affected small businesses as they continue to struggle to make ends meet.  For them, being able to secure easy access to fast financing solutions is what is needed to thrive in the current economic landscape.

A big challenge is that an estimated 55% of Malaysia’s adult population is either unbanked or underbanked, while just 39% Malaysians can get a loan from their bank. Qualifying for a business loan from traditional financial institutions can be challenging and tedious for underserved MSMEs with the requirement for higher collaterals, additional guarantors and delays in loan approval or disbursements.

To address these funding gaps, Boost, a regional full spectrum fintech player, has been empowering thousands of MSMEs since 2019 through its simplified micro-financing solutions. Powered by Boost Credit, its AI-based lending business that’s already operating at scale, its shariah-compliant solution called Capital by Boost Credit enables MSMEs to access the right financing support catered to their needs, no matter how small.

Prior to the pandemic, Boost was disbursing on average US$840,000 (RM3.7 million) loans per month to MSMEs, which then increased to US$6.8 million (RM30 million) loans per month on average in May 2021.

In the 2022 endemic phase, it has soared to between RM50 million to RM60 million per month on average. This indicated a strong need for financing by this community, with over 40% of MSMEs never receiving credit from other financial service providers before, and 90% were repeat rate on loans. Through financing, these MSMEs have been able to keep the lights on and continue their business aspirations.

[RM1 = US$0.227]

Through all of this, Boost has developed a large digitally engaged core customer base with deep data-driven insights to break new ground to build strong value proposition services that solve the pain points of the local communities in need. One such service was the introduction of its Kongsi Klub referral programme.

With economic difficulties arising from the pandemic, it’s no surprise that small business owners — and everyday Malaysians — are looking for additional sources of income. Recognising this, Boost launched Kongsi Klub in 2020 which started as a way to help Malaysians make it through the height of the pandemic by giving them access to a new stream of income.

Those who join Kongsi Klub are called Rakan Kongsi Klub members, and as a Rakan, it is possible to earn extra cash while assisting local businesses gain access to financing. Small business owners can earn attractive incentives when they refer fellow entrepreneurs and SME owners that qualify for financing under Boost Credit.

A Rakan Kongsi Klub  member can receive cash rewards of up to RM1,500 with no minimum cap for each person that they successfully referred. One such example of a Rakan Kongsi Klub is Ismail, from Kuala Berang, Terengganu. Since becoming a Rakan back in 2021, Ismail has earned more than RM20,000 in cash and has helped a friend from his kampung apply for financing with Boost for his business.

Another is Azwan Abdul Rani (pic), an entrepreneur who used to operate a printing business, Anason Printwork. As a result of the pandemic, Azwan had to shut his business. Yet, from joining Kongsi Klub, Azwan managed to earn over RM10,000 from referrals alone.

With Boost’s financing solutions, MSMEs that join as a Boost merchant will be part of an unstoppable community with a brand that is committed to simplifying financial access and improving financial well-being across the region. By empowering them with the right tools to future-proof their business, MSMEs can enjoy a digital and rewarding business journey.