Singapore, 25 March 2021 – Funding Societies, Southeast Asia’s largest SME digital financing platform, today announced that it has crossed €1.2 billion in disbursals to under-served small and medium sized enterprises across the region. This milestone comes as the lender enters its sixth year of operations. The amount has been disbursed through more than 3.9 million loans and as a result, more than 65,000 SMEs across Singapore, Indonesia (where it is called Modalku), and Malaysia have received access to funding that they are otherwise unable to receive from traditional financial institutions. Funding Societies has also successfully raised debt funds from multiple impact-focused institutions including European institutional investors Triodos Fair Share Fund, Triodos Microfinance Fund, and Lendahand. These funds are used for lending to SMEs in Southeast Asia, especially Indonesia.
Funding Societies which is licensed in Singapore, Indonesia, Thailand, and registered in Malaysia, is backed by global equity investors including Sequoia India, Softbank Ventures Asia Corp, and regional ones such as BRI Ventures and Alpha JWC Ventures. The FinTech provides growth capital to small and medium-sized enterprises (SMEs), which is funded by individual and institutional investors. It recorded €5 30 million in disbursals in 2020 alone, while its overall default rate remained under 2% through the pandemic.
According to the World Bank IFC’s estimates, there is a €270 billion SME funding gap throughout Southeast Asia today. This means 51% of the region’s SMEs remain underserved, with a 58% gap in ASEAN GDP. However, SMEs fail to meet the credit criteria of traditional financial institutions due to their minimal credit track record and lack of assets to pledge. Digital financing platforms like Funding Societies provide quick, short-term financing and customised financial solutions to deserving SMEs.
Based on Funding Societies’ 2019 regional Impact study, which surveyed the FinTech’s impact on Singapore’s, Malaysia’s, and Indonesia’s economies, 72% of the respondents said their revenues would decrease if not for Funding Societies’ business financing. 84% of the surveyed small businesses had used the financing as working capital to pay for overheads, inventory, and business equipment, which were all crucial in their efforts to sustain operations.
Kelvin Teo, Co-founder and Group CEO of Funding Societies, said, “We’re thrilled to reach this major milestone before realising it. It is a momentous occasion and encouragement for us. There is much more to do, as we continue to serve the needs of SMEs in the region and Investors globally.”
In a measure to mitigate its portfolio risk in 2020, Funding Societies tightened its credit underwriting criteria to ensure only quality notes were funded, and focused on enterprises that were likely to thrive during the pandemic. These priority sectors included healthcare, medical supplies, and transportation to name a few.
“We’re grateful to the support we have received from retail and institutional debt investors, enabling us to further help SMEs even amidst uncertain times,” Teo continued.
Funding Societies’ recent launch in Thailand, its fourth market, makes it the only SME digital financing platform to be licensed or registered in four countries throughout Southeast Asia. The Fintech has more plans to further expand its domestic and regional presence in the near future.
About Funding Societies
Funding Societies | Modalku is the largest SME digital financing platform in Southeast Asia. It is licensed in Singapore, Indonesia, Thailand, and registered in Malaysia. It is backed by Sequoia India and Softbank Ventures Asia Corp amongst many others and provides business financing to small and medium-sized enterprises (SMEs), which is crowdfunded by individual and institutional investors. In 5 years, it has helped finance over 3.9 million business loans with over S$2 billion in funding. It was given the MAS FinTech Award in 2016, the Global SME Excellence Award at the United Nations’ ITU Telecom World in 2017, KPMG Fintech100 in 2018, Brands for Good in 2019, and in 2020 recognised by IDC as amongst the 5 fastest growing FinTechs in Singapore, won the Stevie® Award for Innovation in Technology, and named ASEAN Startup of the Year by Global Startup Awards.
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