Funding Societies, the Singapore-based small and medium-sized enterprise (SME) digital finance platform, and Credit Guarantee Corporation Malaysia Berhad (CGC) have signed an SME Portfolio Guarantee (SME PG) agreement with the mutual objective of propelling the growth of Malaysian SMEs by providing easier access to financing.
Both parties said in a statement on Friday that through the partnership, Funding Societies and CGC are extending the first tranche of financing up to MYR10 million ($2.27 million) under the SME Portfolio Guarantee Scheme via Funding Societies’ leading digital financing solutions to benefit the underserved and unserved yet creditworthy micro, small and medium enterprises (MSMEs).
The partnership also marks the first strategic collaboration between CGC and an SME digital financing platform.
Under this scheme, eligible SMEs can apply for financing between MYR50,000 ($11358) and MYR500,000 ($113,585).
SMEs that qualify for the SME PG will have access to longer-term financing and enjoy preferential interest rates, lowest among Funding Societies’ existing portfolio of financing from similar segments, easing their monthly cash flows as they grow their businesses, particularly in this post-pandemic period.
“We are pleased to strengthen our partnership with CGC via the SME Portfolio Guarantee agreement,
“With the PG in place, we would widen access to financing facilities for underserved and unserved SMEs in our key market, Malaysia,” said Kelvin Teo, Co-founder and Group Chief Executive Officer of Funding Societies | Modalku.
According to him, these SMEs may have a viable business model but lack the collateral to obtain financing via traditional financing channels.
“Our financing would support SMEs to either expand or sustain their operations, particularly as SMEs bounce back post-Covid in resilience,
“As for our investors, the SME PG also lowers the risks of non-repayment by SMEs,” he added.
Funding Societies | Modalku is the largest unified SME digital finance platform in Southeast Asia.
It is registered with the Securities Commission Malaysia (SC), as well as licensed in Singapore, Indonesia, and Thailand, and operates in Vietnam.
It is backed by SoftBank Vision Fund 2, SoftBank Ventures Asia, Sequoia Capital India, Alpha JWC Ventures, SMBC Bank, Samsung Ventures, BRI Ventures, Endeavor, SGInnovate, Qualgro, and Golden Gate Ventures amongst others.
The FinTech company provides business financing to SMEs, which are funded by individual and institutional investors.
In eight years, it has helped finance over 5 million business deals close to MYR13.39 billion ($3.04 billion) in funding.
CGC was established on 5 July 1972. It is 78.65 percent owned by Malaysian Central Bank and 21.35 percent by the commercial banks in Malaysia.
CGC aims to assist micro, small, and medium-sized enterprises (MSMEs) with inadequate or without collateral
and track records to obtain credit facilities from financial institutions by providing guarantee cover on such facilities.
As of December 2022, CGC has availed over 522,075 guarantees and financing to MSMEs valued at over MYR90 billion ($20.45 billion) since its establishment.
On February 9, 2018, CGC introduced imSME, Malaysia’s first SME online financing/loan referral platform.
The imSME serves as an alternative channel for MSMEs to source for financing products, saving them both the time and the hassle of going through time-consuming processes.
From the time of its inception to the end of December 2022, the imSME portal had received more than 2.41 million visits with more than 66,608 registered MSMEs under the portal.