Funding Societies announced Monday that it has secured a new working capital financing facility from Malaysia Debt Ventures Berhad (MDV), a subsidiary of the Minister of Finance of Malaysia, to support technology-driven and underserved Malaysian small and medium-sized enterprises (SMEs) through its platform.
The facility is structured as a multi-year facility and builds on a relationship between the two organizations that began in 2022, when MDV first participated on the platform to support Malaysia’s technology-based SMEs, the duo said in a statement.
MDV’s mandate is to support the growth of technology-based companies in Malaysia through flexible and specialized financing solutions. This enables businesses to move up the value chain and support their progression towards mid-tier company status, a key priority under Malaysia’s New Industrial Master Plan 2030.
The facility advances this agenda by extending Funding Societies’ digital, alternative-data-driven financing to SMEs at a critical stage of their growth.
It is noted that digital SME financing makes it possible to reach underserved SMEs at scale by leveraging alternative data, enabling faster turnaround times and reducing the cost of serving each financing account compared with conventional credit assessment.
SMEs account for 96.1 percent of business establishments in Malaysia, close to 39 percent of gross domestic product (GDP), and roughly half of national employment.
Supporting a platform that can extend financing across this broad segment has the potential to generate wider economic impact through business growth, job creation and higher incomes, beyond providing credit access to individual SMEs.
To date, Funding Societies has disbursed close to MYR 7 billion ($1.71 billion) in financing to more than 10,000 businesses in Malaysia, while MDV has approved over MYR 14 billion in financing for more than 1,184 technology projects across various high-impact sectors since its establishment in 2002.
“Financing a platform is a multiplier. One facility from MDV reaches thousands of businesses instead of one at a time,
“For MDV, that is development financing doing what it is meant to do at the scale and speed Malaysia’s SME economy actually needs,” said Chai Kien Poon, Country Head of Funding Societies Malaysia.
Sharul Sazman Samaan, Chief Business Officer of MDV, said MDV’s continued partnership with Funding Societies reflects their confidence in the role of fintech platforms in widening financing access for technology-based SMEs.
“By supporting an established platform with strong reach and digital financing capabilities, MDV is able to channel developmental capital more efficiently to businesses with smaller, faster-moving financing needs,
“Through this facility, MDV aims to extend the reach of its financing support while helping more SMEs access the capital they need to grow and contribute to Malaysia’s economy,” he added.
The facility also demonstrates both organisations’ shared commitment to strengthening Malaysia’s SME financing ecosystem by combining institutional funding with digital platform capabilities.
Moving forward, MDV and Funding Societies will continue to explore opportunities to support the financing needs of technology-based and growth-oriented SMEs in Malaysia, said the statement.