KUALA LUMPUR: Funding Societies, Southeast Asia's largest small and medium enterprises (SME) digital financing platform, recently signed a US$50 million (RM223 million) credit facility with HSBC Singapore to continue expanding the firm's reach to underserved SMEs in the region.
Funding Societies co-founder and group chief executive officer Kelvin Teo said the deal marks a critical milestone and is a testament to the platform's credit track record through Covid-19.
"HSBC's foresight, global capabilities, and scalable approach further equip us to satisfy the underserved SME segments in the region," he said in a statement.
Commercial lending in the Asia-Pacific is projected to grow at a compounded annual growth rate (CAGR) of 16.5 per cent, generating a revenue of more than US$7 trillion (RM31.27 trillion) by 2028, which makes up about 25% of the global market size of US$27.4 trillion (RM122.4 trillion).
The SMEs segment is anticipated to grow at the fastest rate. However, closer to home in Southeast Asia, many SMEs are still struggling to secure funding, and it is estimated that there is a US$320 billion (RM1.43 trillion) funding gap in the region.
Digital financing is projected to be the largest contributor to filling that gap and improving that experience.
As a leader in the SME digital financing space in the region, Funding Societies, operated by Modalku Ventures Sdn Bhd, has a disbursement track record of over US$2.6 billion (RM11 billion) through more than 5.1 million transactions across the region.
The platform has disbursed more than RM1 billion in financing to businesses in Malaysia alone.
Through this new facility, the fintech lender will be able to channel the funds via its range of tailored financing solutions across SME segments across all of its five markets.
Funding Societies country head Chai Kien Poon said that in Malaysia, the platform would continue to look for collaborative opportunities with partners across various sectors to help SMEs reach their full economic potential in the recovery phase.
"For the fintech and digital financing spaces to make headway, synergistic efforts with financial institutions and industry players are vital to serving SMEs better," he said.
HSBC Singapore head of commercial banking Regina Lee said that as a leading SME digital financing platform, Funding Societies plays a vital role in contributing to Southeast Asia's new economic growth by driving broader financial inclusion and supporting homegrown companies, which are the building blocks of these economies.
"We are thrilled to support Funding Societies as they expand their reach to serve underserved SMEs in the region," she said.
This announcement comes on the heels of Funding Societies' most recent acquisition of regional digital payments platform CardUp, as part of a series of efforts to diversify its services beyond financing.
The digital financing platform also achieved several strategic milestones, including its Series C+ equity raise of US$144 million (RM643 million) in
February, its recent investment into Bank Index in Indonesia, and market entry into Vietnam, its fifth market.