Malaysia’s digital bank GX Bank Berhad (GXBank) and the International Finance Corporation (IFC), a member of the World Bank Group, will jointly provide loan portfolio of up to $110 million to micro, small, and medium enterprises (MSMEs).
In a statement on Monday, GXBank said the two sides have signed a risk-sharing partnership for the move, also a landmark first for a Malaysian digital bank. Under the partnership, the IFC will provide up to $4.95 million in unfunded first-loss coverage.
This cooperation will protect and scale GXBank’s lending portfolio to unserved and underserved, beginning with MSMEs. By absorbing initial default risks on uncovered assets, the facility complements existing local guarantee frameworks, enabling GXBank to safely extend credit to “thin-file” businesses without traditional financial track records or physical collateral.
By lowering the risk-weighted capital required for these loans, the facility frees up essential balance sheet capacity. This will allow the digital bank to safely deploy more automated credit to underserved entrepreneurs without slowing its growth trajectory, GXBank said.
The IFC partnership reinforces GXBank’s broader strategy to address the credit gap and limited access to financing facing 97.4 percent of Malaysian MSMEs.
“Expanding access to finance for MSME is a key driver for inclusive economic growth across emerging markets,” said Allen Forlemu, Regional Industry Director, Financial Institutions Group, IFC.
Kaushik Chowdhury, CEO of GXBank highlighted “Micro-entrepreneurs form the foundation of Malaysia’s economy, yet traditional collateral requirements leave vast credit demand unmet.”