Funding Societies, the Singapore-based digital finance platform for small and medium enterprises (SMEs), and the Malay Vehicle Importers and Dealers Association of Malaysia (PEKEMA) and have entered into a collaborative effort to facilitate accessible financing through a digital financial platform.
The collaborative agreement, formalized through this partnership, is geared towards extending financial support to PEKEMA members, encompassing vehicle dealers from all
corners of Malaysia, the duo said in a statement on Wednesday.
This undertaking echoes PEKEMA’unwavering commitment to
empower its members and elevate the prestige of the Malaysian automotive sector.
“One pivotal aspect of this accord is the enhanced financial support it affords to PEKEMA members, streamlining their acquisition of vehicle stock for ‘floor stocking’ purposes,” said Mohamed Nazari Noordin, Acting President of PEKEMA.
He further emphasized the importance of this initiative in ensuring smooth business operations and effective fulfilment of customer demands.
According to him, PEKEMA is set to collaborate with both conventional and non-conventional financial institutions to maximize the breadth of the financing ecosystem.
“This innovative approach is poised to invigorate automotive industry sales and provide members with the latitude to explore diverse financing models, aligning with prevailing market trends and requisites,
“The essence of this collaboration with Funding Societies harmonizes with PEKEMA's mission to fortify Malaysia’s automotive sector amid global transformation, leveraging technology and dynamic partnerships,” he added.
In the preceding year, PEKEMA made significant contributions, importing over 46,000 vehicles and retailing approximately 37,000 units, constituting a commendable 5.2 percent of the vehicle industry’s total production (TIV).
In the backdrop of Malaysia’s steady economic growth and the introduction of novel vehicle models, the TIV for the current year is projected to reach an impressive 725,000 units.
With an extensive network comprising more than 340 distributors and 400 warehouses and showrooms throughout the nation, PEKEMA said the firm is well-positioned to continue its pivotal role in the automotive domain.
Simultaneously, Chai Kien Poon, Country Head of Funding Societies Malaysia, expressed enthusiasm about the collaboration’s potential to introduce a groundbreaking
vehicle stock financing paradigm, seamlessly integrated within PEKEMA’s vast network of almost 300 Approved Permit (AP) holders.
This financing mechanism empowers AP holders to broaden their vehicle stock, mitigate cash flow constraints, and facilitate business expansion.
“Through synergizing Funding Societies’ acumen in SME digital financing with PEKEMA’s expansive network, we are confident in our ability to positively impact vehicle dealers aiming for nationwide expansion,
“This aligns with our objective to bridge the SME financing gap and fuel economic growth,” Chai added.
According to the statement, the automotive sector in Malaysia contributed a substantial MYR 64.5 billion ($13.9 billion) to the gross domestic product (GDP) in the preceding year, driven by post-pandemic demand rebound, and the figure is projected to rise to MYR 104.2 billion ($22.46 billion) by 2030.
Despite this growth, the two parties opined that certain industry segments continue to face challenges, especially with financing access.
Thus, they said the collaboration between PEKEMA and Funding Societies aims to address these issues by offering tailored financing solutions that meet the needs of emerging vehicle dealers.
Chai added that this customized financing program, in collaboration with PEKEMA, offers a range of advantages for AP holders – lower financing cost, higher financing limit, credit period up to 120 days, and streamlined application process.
“AP holders that meet the following criteria – private and public limited companies, with at least 30 percent Malaysian ownership, a minimum of one year in active business operation, and no pending legal actions or litigation – can apply for the financing,” he said.
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.
The firm 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.
Established over forty years ago, PEKEMA is serving as a collective hub for importers of new and refurbished cars and motorcycles from esteemed suppliers in developed nations like Japan and the United Kingdom for Malaysian automakers.
With a legacy spanning four decades, the organization has nurtured an extensive network encompassing more than 340 members across the nation.
Headquartered in the technological nucleus of Cyberjaya, Selangor, PEKEMA’s expansive presence is fortified by almost
400 licensed warehouses and showrooms, owned by nearly 300 AP Holders.
The organization commands a five percent market share of the total passenger vehicle sales industry.
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