The past three years and a half have been transformative for Funding Societies Malaysia (FS Malaysia). We have achieved and surpassed critical milestones, grew significantly, launched amazing products and signed meaningful partnerships, all of which have been recognized through the multitude of awards we have received. These achievements reflect more than just successful years – they also represent progress towards achieving our core mission: to uplift societies in Southeast Asia by creating financial opportunities for every business.
There is currently a USD175 billion of SME financing gap in SEA alone, with the figure continuously and rapidly growing. One main reason contributing to this huge gap is the lack of bankability of the millions of the SMEs – also majorly the reason why banks shy away from serving the SMEs. This is where we, Funding Societies came in with a cost-efficient model, with the ability to offer alternative financing opportunities to the vast majority of underserved SME segment using FinTech to significantly ease up the application process by leveraging on alternative data and machine learning as part of our credit assessment process.
Looking back at some of the great years for FS Malaysia, our investors, clients, and partners, we have compiled a review summary of our notable achievements over the years to share with you.
2017: The birth of Funding Societies Malaysia
Following the Securities Commission of Malaysia’s appointment of the first six operators to run peer-to-peer (P2P) financing platforms in the country in late 2016, Malaysia impressively became the first country in the ASEAN region to regulate P2P financing. Subsequently, in February 2017, we became the first P2P operator to launch in Malaysia. In the first year that we started, there were less than 20 of us running the platform, all with the unwavering commitment of providing a simplified, alternative financing channel for the thousands of underserved local SMEs. In the very same year, we announced our first Series A fundraising of RM30 million, following successful disbursement of RM17 million across the local SMEs.
2018: P2P financing took off in SEA
Having served hundreds of SMEs since the year that we started, we realised there was a segment of the SME market that remained heavily underserved. This is also the group who undoubtedly has the least resources – the micro enterprises. To address this concern, we launched FS Bolt, a fully automated mobile loan product targeting micro entrepreneurs and businesses. FS Bolt also marked the launch of our first financing app, where we strived to further simplify the end-to-end processes of financing applications whereby businesses can obtain financing of up to RM50,000 in just 24-hours! As we keep growing, we established more partnerships with various industry players including banks, payment platform, car bidding platform, among others to widen our SME reach across the country.
By the end of the year, FS Malaysia has successfully disbursed RM100 million in SME working capital, five times more than what we had achieved in our first year – signifying a positive take-off of P2P financing in Malaysia. To top it off, we had proudly announced our Series B fundraising of RM100 million, the largest fundraising for a Southeast Asia-based P2P financing platform.
2019: Our year of exponential growth
From cementing our position as the largest P2P financing platform in Southeast Asia to launching new products and announcing exciting new partnerships, 2019 was another exciting year. The value of total disbursed working capital for the SMEs is, of course, a key metric for Funding Societies. In 2019, this was up by 200% from 2018, passing a significant milestone of RM300 million. This growth reflected the significant number of Issuer notes being funded and the investors we have helped empower financially. Our unique SME clients increased to over 1,000 SMEs served in Malaysia, while registered investors reached 40,000, ultimately translating into FS Malaysia as the P2P financing platform of choice for both SMEs and investors alike.
Through this year of extraordinary growth, we have also collaborated with more new partners, most notably e-commerce giant Lazada, Southeast Asia deals leader Fave and leading local and regional used car trading platforms, myTukar and Carsome, to expand our services to over thousands of small businesses and merchants.
With a strong team of more than 80 employees to-date, we have undeniably accomplished a lot in the last several years, serving our clients across Malaysia, Singapore, and Indonesia. For that, we are proud to be recognized with multiple accolades, both on the regional and local scales. These recognitions include, among many others, the IDC Financial Insights’ 101 Fast Growing Asia/Pacific FinTechs, H2 Ventures and KPMG’s Fintech100 – Emerging 50 Rising Star, and most recently the Digitalizing Services for Retail Participations award by Securities Commission Malaysia during the INVESTSMART® FEST 2019 for our contribution towards investor education initiatives and facilitating the growth of investments among retail investors. All these accomplishments serve to reaffirm the positive impact we have created towards the unserved and underserved SME segment, which is exactly what set out to do since day one.
2020 and our commitment to the future
Despite all the successes, we do realize that we are very much just scratching the surface in terms of enabling greater access to financing for SMEs and close the RM80 billion financing gap currently facing Malaysian SMEs alone. This is especially crucial with the uncertain economic situation that we are currently in.
On the back of the RM740 million raised by P2P financing platforms since their first introduction, the additional RM50 million allocation towards the My Co-Investment Fund (MyCIF) as announced by the Government in the 2020 Budget tabling clearly reflected the Government’s trust in the industry’s potential to help bridge the SME financing gap, by leveraging on technologies to reach out and serve both unserved and underserved local SMEs. Further to this, we also lauded the digitally-driven and SMEs-focused National Economic Recovery Plan (PENJANA) announced as part of the Government’s strategic measures to support individuals and businesses impacted by the COVID-19 pandemic.
Wong Kah Meng, our Co-founder and Chief Executive Officer of Funding Societies Malaysia, notes, “COVID-19 has significantly changed the way the Malaysian economy operates, and digitalisation is ultimately the way to go in this New Normal. We are thrilled to be part of this digitalisation movement, particularly as we chart new territory in the FinTech space.”
Despite the difficult times that we are experiencing, we at Funding Societies, remain positive that Malaysia will navigate through these unprecedented times swiftly as together, we nurture our nation’s economic recovery. This will then pave the way for us to realise not only the nation’s ambition towards Industry 4.0 but also a more digitalised SME landscape in Malaysia for years to come.
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