NST Business
KUALA LUMPUR: Funding Societies Malaysia (FSM) platform obtained the debt crowdfunding license from Thailand's Securities and Exchange Commission (SEC) earlier this month, enabling it to support the country's small and medium enterprises (SME) and startups in raising funds from retail and institutional investors.
Co-founder and chief executive officer Wong Kah Meng said based on International Finance Corporation (IFC) numbers, there is a staggering US$250 billion or approximately RM1 trillion financing gap in Malaysia, Singapore, Indonesia, and Thailand combined.
"This presents tremendous opportunity for digital financing platforms such as FSM to tap on and financially support local SMEs.
"Our foray into Thailand will serve to strengthen our regional foothold in the digital financing space, as we remain steadfast in our mission to support underserved SMEs across the region. As it has in other countries, peer-to-peer (P2P) financing is expected to digitally transform the financing business and reduce funding gaps in the Thai market," he said in a statement today.
While Thailand has more than three million SMEs, more than half face multiple challenges in obtaining financing, especially to meet short-term working capital requirements.
Traditional financial institutions tend to focus on long term and asset-backed (collateralised) financing products, leaving a SME financing gap of over US$40 billion (RM162 billion), according to IFC.
This lack of funding has also been exacerbated due to the ongoing Covid-19 pandemic as lenders have attempted to reduce their loan exposures in order to manage risk.
FSM offers a range of collateral-free financing options including business term financing, micro financing, invoice financing, and dealer financing via a quick application process.
The financing support can help fuel business expansion or support working capital needs, such as purchasing inventory or covering up-front project costs.
The platform has also established regional partnerships with companies such as Lazada, Carsome, CIMB Bank, and Zilingo thus serving SMEs within their ecosystem.