Southeast Asia SME digital financing platform Funding Societies has launched its green loans product, in which it offers a 40 percent discount on interest on its unsecured microloan offerings to small businesses that satisfy one of the “green” criteria.

“We are looking to empower SMEs not just in digital financing but also solving their other pain points over time,” Funding Societies Co-Founder and Group CEO Kelvin Teo said in a statement on Wednesday.

“Other ways we are looking to create an impact is through ESG-related financing. It is in line with the government’s Green Plan, satisfies demand from our investors for sustainable investment opportunities, and frankly the right thing to do,” he added.

The “green” criteria to be fulfilled include:

  • Green industry: company belongs to an industry that promotes environmental and climate solutions
  • Green project: company is embarking on a project that has clear tangible outcomes for the environment and climate
  • Green certification: company is working towards or already has an industry-recognized green certification

Funding Societies launched its green loans product at a time when environmental, social, and governance (ESG) investing and sustainable investing are gaining traction in the investing fraternity.

Blackrock’s 2020 Global Sustainable Investing Survey revealed that 54 percent of its global respondents consider sustainable investing to be fundamental to investment processes and outcomes, and 57 percent of APAC respondents stated that sustainable investing is already – or will become – central to their investment strategies.

On another matter, Funding Societies also announced on Wednesday that it has released its regional impact study. Its 2020 survey measures the social and economic impact of its funding to Funding Societies-linked MSMEs (micro, small and medium-sized enterprises) in 2018 and 2019 across Singapore, Indonesia, and Malaysia.

The recent study by Funding Societies showed that 72 percent of the respondents said their revenues would decrease if not for the FinTech’s business financing.

Meanwhile, 84 percent of the surveyed small businesses had used the FinTech’s financing as working capital to pay for overheads, inventory, and business equipment, which were all crucial in their efforts to sustain operations, according to the regional impact study released on Wednesday.

Applying the Multi-Regional Input-Output global value chain (MRIO-GVC) method of estimating sectoral contribution, which is pioneered by the Asian Development Bank, the study also employs data collected from Funding Societies’ internal systems and user research to measure the lender’s impact.

Sector, revenue, expense, depreciation, and employee numbers are among the data points factored into the program that creates the outputs of Funding Societies’ survey.

In its six years of operations, Funding Societies has financed over $1.8 billion through more than 4.8 million loans to nearly 100,000 MSMEs in the region.

The SME lender offers microloans from $500 up to $1.5 million, which can be disbursed in as fast as 24 hours, to SMEs who face the pertinent challenge of accessing business funds.

Funding Societies or Modalku is the largest SME digital financing platform in Southeast Asia. It is licensed in Singapore, Indonesia, Thailand, and registered in Malaysia. It is backed by Sequoia India and Softbank Ventures Asia Corp among many others and provides business financing to SMEs, which is funded by individual and institutional investors.

Singapore-based Funding Societies raises $18M in debt, on track to raise $120M