Funding Societies’ Islamic financing solutions empower over 2,500 Malaysian MSMEs with US$64 mil disbursed within first year of launch

• Plans to increase its Islamic financing portfolio by 50% by 2025
• Aims to support underserved SMEs with short-term financing in 5 SEA markets

Funding Societies, Southeast Asia's largest unified digital finance platform for SMEs, has disbursed US$64 million (RM300 million) in Islamic business financing to more than 2,500 micro, small, and medium enterprises (MSMEs) in Malaysia since launching its comprehensive suite of Islamic products in June 2023. In a statement, the company said this milestone, achieved through 8,000 Islamic investment notes, underscores its commitment to empowering MSMEs.

With Malaysia’s global leadership in Islamic finance and the Islamic capital markets, offering a wide range of Shariah-compliant solutions alongside conventional structures is essential to narrowing the US$64 billion (RM290 billion) micro-SME (MSME) financing gap as identified by PwC for Securities Commission Malaysia.

Chai Kien Poon, country head of Funding Societies Malaysia (pic), said, “We are proud of the team for reaching another milestone, surpassing the US$64 million (RM300 million) disbursement mark in just one year and providing access to financing for more than 2,500 MSMEs, well ahead of our targets. This underscores the interest and demand for both Islamic financing and investment products. Islamic financing already constitutes 15% of our portfolio, and we aim to increase this to 50% by 2025.”

[RM1 = US$0.21]

Against a backdrop of rising inflation and operational costs, SMEs are pivotal to Malaysia's projected 4% - 5% GDP growth in 2024. Therefore, the need for ongoing financial support is critical to their growth trajectory, fostering job creation and enhancing economic contributions. 

"We are grateful for the support from partners like Credit Guarantee Corporation Malaysia, who collaborated with us on the Islamic SME Portfolio Guarantee Scheme. Malaysia Digital Economy Corporation (MDEC) has also played a vital role in developing our Islamic financing products through the Global Technology Grant Programme. Furthermore, SME Corporation Malaysia's appointment under the Bumiputera MSMEs Financing Initiative reaffirms our commitment to socially impactful outcomes,” Chai said.

According to the Global Islamic Fintech Report 2023/24 by Dinar Standard, the Islamic fintech market is poised to grow significantly, surpassing the broader fintech sector. Malaysia and Indonesia have emerged as Islamic fintech hubs, reflecting robust transaction volumes and market potential. The halal economy, valued at US$6.25 trillion as of 2022, continues to expand, with Malaysia leading in global rankings since 2012, according to the State of the Global Islamic Economy Report 2023. This highlights significant potential for Malaysian MSMEs in the halal economy to utilize digital Islamic financing solutions to support their growth initiatives.

As Funding Societies continues to expand across its five key markets in Southeast Asia—namely Malaysia, Indonesia, Singapore, Thailand, and Vietnam—its focus remains on supporting underserved SMEs via its extensive range of short-term financing solutions. Currently, the company’s Islamic products are only available in Malaysia.

Looking ahead, the firm aims to continue forging new industry partnerships to expand its outreach to underserved yet creditworthy SMEs, adding that collaborations between financial institutions, fintechs, and corporates are key to advancing the Malaysian economy.

For more information on Funding Societies' full suite of Islamic financing products , please visit https://fundingsocieties.com.my/islamic-financing. For more information on Funding Societies Islamic investment products, please visit https://fundingsocieties.com.my/guaranteed-islamic-investment-notes?tab=signup.