Funding Societies, the Singapore-based unified digital finance platform for small and medium sized enterprises (SMEs), has successfully disbursed MYR 300 million ($64.22 million) in Islamic business financing to more than 2,500 micro, small, and medium enterprises (MSMEs) in Malaysia since launching its comprehensive suite of Islamic products in June 2023.

Funding Societies said in a statement on Tuesday that this milestone, achieved through 8,000 Islamic investment notes, underscores the firm’s commitment to empowering MSMEs.

With Malaysia’s global leadership in the Islamic finance and the Islamic capital markets, Funding Societies noted that offering a wide range of Shariah-compliant solutions alongside conventional structures is essential to narrowing the RM290 billion micro-SME (MSME) financing gap as identified by PwC for Securities Commission Malaysia.

“We are proud of the team for reaching another milestone, surpassing the RM300 million disbursement mark in just one year and providing access to financing for more than 2,500 MSMEs, well ahead of our targets,” said Chai Kien Poon, Country Head, Funding Societies Malaysia.

“This underscores the interest and demand for both Islamic financing and investment products,

“Islamic financing already constitutes 15 percent of our portfolio, and we aim to increase this to 50 percent by 2025,” he added.

Against a backdrop of rising inflation and operational costs, Funding Societies said SMEs are pivotal to Malaysia’s projected 4 percent to 5 percent gross domestic product (GDP) growth in 2024.

It opined that the need for ongoing financial support is critical to their growth trajectory, fostering job creation and enhancing economic contributions.

Cited the Global Islamic Fintech Report 2023/24 by Dinar Standard, it said the Islamic fintech market is poised to grow significantly, surpassing the broader fintech sector.

It noted Malaysia and Indonesia have emerged as Islamic fintech hubs, reflecting robust transaction volumes and market potential.

Cited the State of the Global Islamic Economy Report 2023, it said the halal economy, valued at $6.25 trillion as of 2022, also continues to expand, with Malaysia leading in global rankings since 2012.

It said this highlights significant potential for Malaysian MSMEs in the halal economy to utilize digital Islamic financing solutions to support their growth initiatives.

As Funding Societies continues to expand across its five key markets in Southeast Asia, it said its focus remains on supporting underserved SMEs via its extensive range of short-term financing solutions.

Looking ahead, Funding Societies said it aims to continue forging new industry partnerships to expand its outreach to underserved yet creditworthy SMEs.

Collaborations between financial institutions, fintechs, and corporates are key to advancing the Malaysian economy, it added.

Funding Societies | Modalku is the largest unified SME digital finance platform in Southeast Asia.

The firm 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 Khazanah Nasional, SoftBank Vision Fund 2, SoftBank Ventures Asia, Sequoia Capital India, Alpha JWC Ventures, SMBC Bank, Samsung Ventures, BRI Ventures, Endeavor, SGInnovate, Qualgro, Golden Gate Ventures, and Penjana Kapital amongst others.

The FinTech company provides business financing to MSMEs, which are funded by individual and institutional investors.

Khazanah and CGC Digital invest in Funding Societies to broaden financing access to MSMEs