Funding Societies ends 2017 as domestic market leader of Malaysia’s rapidly growing digital financing sector. Data compiled by all digital financing operators in Malaysia from February 2017 to November 2017 shows that digital lending platforms have raised a total of RM17 million for local SMEs. Of the RM 17 million, Funding Societies alone contributed to around RM10 million in financing or more than half of the total amount, while maintaining a default rate of 0%.
According to estimates cited by Securities Commission (SC) Malaysia, there is a RM80 billion SME financing gap in Malaysia. Yet domestic SMEs make up 97% of businesses in Malaysia and contribute to 65% of national employment.
To tap into the digital financing’s enormous potential to address the SME funding gap, Malaysia became the first country in ASEAN to regulate digital financing when Securities Commission (SC) introduced six P2P operators in November 2016. Additionally, the Asian Institute of Finance expects crowdfunding to pick up the pace in the near future as a critical source of alternative financing for micro, small, and medium enterprises (SMEs) in Malaysia.
Since Funding Societies launched in February 2017, the platform has seen strong interest from both investors and SMEs. Our team is excited and delighted that that SME digital financing has taken off to a strong start and thankful for the opportunity to serve a wide variety of local SMEs. None of our achievements would have been possible without the support and trust of our users. Funding Societies still has a long way to go; we plan to accelerate total SME financing in 2018, maintain strong risk management practices, and build greater awareness of SME digital financing in Malaysia.