HLB Jumpstart to provide financing for micro entrepreneurs

• Funding will be dispensed through MADCash, AlfieTech
• Opened  to individuals who lack credit history, full-time employment

With social finance slated to play a greater role in advancing financial inclusion and enabling social development in Malaysia, Hong Leong Islamic Bank (HLISB) has rolled out a brand new social finance programme, ‘HLB Jumpstart – Micro Business’ as part of its value-based intermediation offerings. 

In a statement, the bank said this programme will provide funding to individuals who may not have the opportunities and means to secure full-time employment. 

This programme is also open to aspiring entrepreneurs who lack credit history and the opportunity for them to start their own small businesses, it added.

With this new social finance initiative, HLISB said it will disperse funding through its two partners - MADCash and AlfieTech. 

It will also provide zero-profit financing and capital opportunities to start a business, as well as mentorship and training on how to manage the business, the bank added.

The ultimate goal is to help underserved micro entrepreneurs, which can include gig economy workers, homemakers, and thin-file individuals, improve their livelihoods by having a sustainable source of income, it said.

Jasani Abdullah (pic, above), chief executive officer of HLISB, said this programme is part of the bank’s efforts to strengthen its VBI offerings as a means to positively and sustainably impact underserved communities.

“We are encouraged by the positive impact seen across the businesses of some of AlfieTech and MADcash’s participants.

“This is a testament that social finance is an effective avenue for narrowing financing gaps in the country by empowering the underserved communities via increasing access to financial services and improving financial literacy,” said Jasani.

Both Andrew Tan, co-founder of AlfieTech and Nuraizah Shamsul Baharin, managing director of MADcash shared their enthusiasm for working alongside HLISB to meaningfully impact more people.

Tan said a big part of his business is ensuring his participants can reap the benefits of the digital economy. 

For MADCash, on top of providing seed funding to aspiring entrepreneurs, Nuraizah said that an added value they provide is mentorship to help upskill their business and financial acumen.

‘HLB Jumpstart – Micro Business’ is a new extension under HLB Jumpstart that works closely with promising entrepreneurs and social enterprises to support them with opportunities to start their own sustainable businesses. 

The programme aligns with Bank Negara Malaysia’s Financial Sector Blueprint 2022 – 2026 to elevate social finance as an integral part of the Islamic finance ecosystem.

According to HLISB, participants can obtain two types of seed funding for their businesses.

Through MADCash, participants will get startup funds of US$843 (RM4,000) per participant with a payback tenure of 12 months at a zero-profit rate. 

Additionally, participants will also be assigned a mentor who will provide guidance and share best practices to build a successful and sustainable business, it said.

AlfieTech, on the other hand, will disburse up to US$316 (RM1,500) per applicant to use as e-commerce credit to run the business by placing orders on their own proprietary platform.

The bank said both MADCash and AlfieTech both have a common purpose to drive financial inclusion amongst underserved communities. 

MADCash is a shariah-compliant fintech ecosystem builder with a mission to empower women micro-entrepreneurs to improve their income and credit standing by providing micro-funding and facilitating digital financial inclusion. 

Whereas AlfieTech is an alternative data intelligence company that also offers digital micro-financing to underserved communities.

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