Funding Societies Group have reached a total of more than RM600 million in disbursed working capital to nearly 7,000 SME (small and medium-sized enterprises) financing in Southeast Asia since its establishment.
The RM600 million milestone was achieved in July 2018; in only 6 months, the company doubled its total disbursement for SMEs in Malaysia, Singapore, and Indonesia. The platform provides a range of financing products to support SMEs, including invoice financing to address cash flow problems and micro-financing through its mobile app FS Bolt.
Since the start of 2018, Funding Societies Malaysia’s contribution to total regional disbursement increased to nearly 400%. The numbers show how Funding Societies Group significantly expanded its reach in Malaysia and Southeast Asia throughout the year. Currently, the company holds more than 50% of domestic market share in Malaysia’s rapidly growing P2P financing sector.
Funding Societies connects local, creditworthy SMEs with investors (both individual and institutional) through a digital marketplace, thus increasing access to financing for the SME sector.
While SMEs are widely acknowledged to be the backbone of a national economy, Securities Commission (SC) estimates that there is a RM80 billion financing gap for domestic SMEs. Bank Negara Malaysia (BNM) notes that the development of alternative finance in Malaysia can help bridge the financing gap and open new opportunities for innovative businesses.
To address cash cycle problems often encountered by SMEs, Funding Societies offers invoice financing, where SMEs can pledge unpaid customer invoices as collateral to get immediate cash at a discount to plug a cash flow gap. Invoice financing can be disbursed within 2 weeks upon completion of document submission. The process speed, from assessment to approval to disbursement, is crucial to address a cash flow gap in the business cycle.
Funding Societies also provides up to RM50,000 in micro-financing through its mobile app, FS Bolt. The funds can be disbursed in as fast as 1 day upon full document submission, while the application process only takes 10 minutes.
Funding Societies data shows that more than 42% of SME applicants in Malaysia are millennials (those born between 1981 and 1996), showing a growing appetite among young business people for alternative finance products that are technology-driven and easily accessible. Financing like FS Bolt, which require only a smartphone and an app download to use, can be accessed anytime and anywhere - making it a product that suits the millennial lifestyle. In addition, Funding Societies offers up to RM500,000 in business term financing.
Wong Kah Meng, CEO of Funding Societies Malaysia, said, “We are very proud to reach far more SMEs in Southeast Asia, including Malaysia, over the past 6 months. Increasing awareness of alternative finance, including through digital platforms like Funding Societies, have contributed to our success in meeting the economic needs of underserved local SMEs. We foresee the trend for alternative finance growing stronger in the months and years to come, as awareness builds further.”
He added, “SMEs play a vital role in supporting the national economy and we want to consistently support the sector’s growth. Going forward, we want to widen access to working capital financing to even more SMEs in Malaysia and Southeast Asia. Through our range of alternative finance solutions for SMEs, Funding Societies hopes to create more positive impact for SMEs and the Southeast Asian economy. We take our mission to build “Stronger SMEs, Stronger Societies” very seriously.”
Funding Societies is the first and largest P2P financing platform in Malaysia. It also operates in Singapore and Indonesia (under the local name Modalku). Funding Societies is registered with Securities Commission.
The company received the largest Series A and Series B Funding for a Southeast Asian P2P financing platform, respectively amounting to USD 10 million and USD 25 million. Its Series B Funding round was announced in April 2018 and was supported by SoftBank Ventures Korea, Sequoia India, Alpha JWC Ventures Indonesia, and Golden Gate Ventures.