Funding Societies Malaysia crosses significant milestone

• Milestone comes as the platform enters its fifth year of operations
• Claimed to have achieved US$239mil in disbursements

Funding Societies Malaysia has claimed that it has achieved US$239 million (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. 

[RM1 = US$0.239]

In a statement, the digital financing platform said the milestone comes as it enters its fifth year of operations in the country.

Learning from the challenges and uncertainties it faced in the past two years, the platform said it was in a better position to react and to adjust its business model and risk underwriting.

This has resulted  in 100% growth of financing deals in 2021 compared to the previous year, while maintaining a default rate of around 3%, it claimed.

Funding Societies said it 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, it said.

Wong Kah Meng (pic above), 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 micro SMEs, in line with their increased awareness on digital financing platforms. 

“This US$239 million 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,” said Wong.

The organisation said in its inaugural regional impact study released late last year, which surveyed the platform's impact on Singapore, Malaysia and Indonesia economies, the study 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, it said.

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, it said.

The platform further claimed it has on-boarded more than 50,000 investors to-date, a testament of the trust by investors. Additionally, 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 micro SMEs,” Wong said.

“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,” Wong added.