General Misunderstanding of P2P Financing in Malaysia – by Sam Wong

General Misunderstanding of P2P Financing in Malaysia

My Name is Sam Wong, a Business Development Manager from Funding Societies Malaysia. Prior to joining Funding Societies, I have been in banking for more than 8 years serving SME, Commercial and Corporate Lending. My day-to-day job pretty much involved in credit paper writing, risk management, financial analysis, and relationship management with customers etc.

Being in the Bank is relatively easy to convince, as the brand is well-recognized, and most banks have existed for more than half a century in Malaysia. In the past, I had jumped to newer banks, some with only 10 years of establishment  in town, and were still able to perform.

But it’s never as hard as being in a ‘mini SME financing provider’ that is 2 years old at that time, simply due to market/ customers perception, therefore I would like to share more about this ‘mini SME financing provider’ that I am working with and how are we different from traditional banks, and how we aim to help the community as per our tagline: STRONGER SME, STRONGER SOCIETIES.

I still remember my first day at work, the moment I entered my new office, it’s a pretty simple office with less than 10 colleagues at that time, including my CEO, Kah Meng (since then we have grown to a team of 35, and more to come).

In hindsight, it was a pretty small team at that time. I would be lying if I say this question didn’t cross my mind:-  ‘is this a legit crowdfunding platform registered with Securities Commission of Malaysia?’ (Can’t help but to imaging what was Kah Meng thinking when he decided to join Funding Societies Malaysia :P).

But this is how start-up companies are like in Malaysia (will leave this to another post other time). In my past working experience with the banks, I was welcomed with numerous new colleagues in  an organization that has 3000-5000 workers at any point of time.

So it was definitely a culture shock for me. Nonetheless, I had set appointment on my first day of work, so no time wasted, I went on to meet my first customer. It helped me to regain my confidence as we were able to actually help customers to go through their ‘difficult cashflow period’.

This first SME customer that I met was a traditional old-time bank customer with close to one hundred million sales turnover (in Ringgit Malaysia Term), who is also known to me for some time from banking days. However, to my surprise, this round, he needed my service as the banks that used to serve his business had turned them down after they confirmed an order for a project they committed.

He was caught with no other options and almost gave up on the project that could help their company to increase their business volume (they really think so at that time). So I went on and explained to this SME how we were able to help them as a P2P platform.

As I mentioned earlier, as a traditional bank customer, they were used to this sweet interest rate and tenor offered by banks. And therefore, when they hear of P2P financing interest rate and tenor, most customers will have second thoughts. There were many doubts and misconceptions about us such as:-

  1. Whether are we license money-lender/ in other words (ah long)?
  • We are not a money-lender to begin with. We are a registered debt crowdfunding market operator under Securities Commission. It allows us to crowdfund from the market to then finance SMEs on their working capital requirement and also better cash flow planning. (For list of market operators please refer to


  1. What do Peer to Peer Market Operator do?
  • As a P2P Platform, we answer to both SMEs and investors. On SMEs, we verify and underwrite the financing just like bank does, to ensure that it is the most risk suitable investment available for our investors. At the same time, we also screen through our investors properly to align with securities commission regulation. Understand more about P2P financing.


  1. Whether is crowdfunding business model legit or is it similar to money game?
  • It’s a new concept in Malaysia although crowdfunding exists in US and China since 2010 and 2012 respectively. However, we are definitely not money game or any other illegal business as we are well-regulated by Securities Commission Malaysia.

Nonetheless, this SME applied with us and managed to obtain the funds within two weeks time, totally exceeded his expectation. He thanked me the best way that anyone could have, by introducing his friends and customers to me.

We consider him now as our influencer. We used to joke that he was not only signing a financing agreement, but he was also signing as Funding Societies Ambassador.

To be fair, it’s normal to doubt, but always ‘Doveryai Nor Proveryai’ (Trust But Verify). There is a reason Securities Commission Malaysia registered Funding Societies Malaysia and other P2P Operator as market operators. We are here to bridge the gap.

Traditionally, the banks have never served SME or businesses that is incorporated between 1 to 3 years. This is simply because there is no proven track records, and therefore they are not served or underserved by the banks.

Many of them are in fact first time borrowers with no collateral or credit guarantee to offer. But does it mean that these businesses have no potential to grow? (it doesn’t seem so). With the help of Funding Societies, we are even serving the matured SME that is underserved by the banks (as per earlier case study).

As I mentioned earlier, when I first joined the company with less than 10 colleagues, we are slightly below RM5Mil on total crowdfunded and disbursed amount, and today (exactly one year mark), we crowdfunded and disbursed to more than 100 SMEs in the market, growing more than 15 times in Malaysia alone (Malaysia’s contribution to group has increased 400%, and group wise FS has disbursed more than RM670 Mil regionally across Malaysia, Singapore and Indonesia).

Are we satisfied? Well, the answer is No, as the gap of financing in Malaysia for SMEs is in tens of billions, we need to work harder with other P2P Operators in the market to bridge the gap and hopefully reach out to more SMEs and be able to help them.

As a P2P Platform operator, we will ensure we are compliant with regulators direction at the same time driving business by making sure it’s a WIN-WIN situation to both our investors and borrowers, that serve the objective of the company, STRONGER SME, STRONGER SOCIETIES.


For more questions, feel free to post them on the comment section or write to me at I will be happy to assist on both borrowers and investors queries. Cheerios

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