Since our co-founders launched Funding Societies in 2015, SMEs have been central to our story. Driven by our belief that stronger SMEs create stronger societies, we align our vision to empower SMEs in Southeast Asia. But why SMEs?
The SME Financing Gap
SMEs dominate Southeast Asia’s business landscape, making up 99% of companies in the region. These businesses employ nearly two-thirds of the workforce and contribute to almost 40% of the GDP in some Southeast Asian countries. (ADB, 2024). Yet despite these impressive numbers, SMEs still struggle with growing and sustaining their businesses.
Access to capital and inclusive finance is an important factor for SME growth. But due to their higher risk profile, many SMEs lack access to quality financing, resulting in underserved and underbanked businesses. For some SMEs, these barriers can even force them to resort to unofficial financing sources. When in practice, these unofficial channels often come with higher costs and more precarious terms, increasing financial risk and potentially hindering SME growth.
SMEs also experience a phenomenon called the “missing-middle”, which refers to the growing gap in funding and support available for small and medium-sized enterprises (SMEs). Beyond limiting individual SME growth, lack of access to finance and financial inclusion hinders the achievement of the SDGs, restricting inclusive social and economic growth.
What happens when SMEs grow?
When SMEs gain access to the capital they need, the impact extends beyond individual business growth. SME growth can drive transformation in their communities and kickstart wider financial inclusion for more people. When SMEs grow:
- Jobs are created: A growing SME not only hires more people within their operations but also creates demand for suppliers, logistics providers, and professional services throughout the value chain, multiplying job creation.
- Communities prosper: SMEs tend to hire locally and source materials from nearby suppliers, ensuring economic benefits stay within their communities rather than flowing to distant shareholders.
- Innovation accelerates: With access to capital, SMEs can invest in new technologies, develop better products, and explore new markets.
- Regional integration strengthens: Well-funded SMEs can participate in ASEAN’s integrated market, creating cross-border trade opportunities that benefit the region
Funding Societies: Strengthening SMEs through Inclusive Financing
Understanding this financing gap, Funding Societies seeks to bridge it through our tailored financing solutions and products.
Funding Societies specialises in short-term financing across micro, small, and medium enterprises to enable financial inclusion for these businesses. Through our model of P2P lending and digital financing, we are able to provide more accessible financing and faster fund disbursement. As a result, more underserved SMEs in need of financing can be served. Moreover, we also have the advantage of regional insights since we operate across 5 countries in Southeast Asia, including Singapore, Indonesia, Malaysia, Thailand & Vietnam.
SMEs typically come to Funding Societies in 4 scenarios:
- Building credit history: They are new to business loans and would like to get financing as well as build their track record, to graduate from financing business with personal loans.
- Supplementing bank loans: They have a bank loan, but the loan size is too small given their lack of collateral. In these scenarios, FSMK serves as top-up financing for them, if they have sufficient cash flow for repayment.
- Speed requirements: They need financing quickly, and banks are too slow to meet their urgent needs.
- Flexible financing: They need flexible forms of financing such as invoice financing, which banks only offer to corporates rather than SMEs.
Integrating Sustainability for SMEs’ growth
Complementing our work in financial inclusion, Funding Societies has also been growing our sustainability strategy and presence, which began in mid-2021. We recognize that SMEs have great potential in becoming a driver of sustainability practices, but they often face challenges such as a lack of knowledge or resources. We strive to help these SMEs overcome these challenges in their sustainability journey through our initiatives.
Internally, we implement sustainability principles by integrating them into our business practices. For example, our Environmental and Social Management System (ESMS) incorporates ESG risk assessment directly into our credit underwriting process.
Based on our activities, we seek to contribute to the achievement of the Sustainable Development Goals (SDGs), especially those that are within our business context. Funding Societies has identified the following 5 SDGs as most relevant to our business:
Contributions to Society
Our commitment to these SDGs translates into measurable impact across the region. Since our inception, we have contributed to economic growth and social development in the countries where we operate, creating specific outcomes that align with our focus areas:
Driving economic impact: As of June-2025, Funding Societies has disbursed over $4.7 billion to around 100,000 SMEs in 5 countries, providing SMEs with the opportunity to grow and expand their business. We have also processed an annualized payments gross transaction value (GTV) of over US$1.4 billion in June-2025, since expanding into our payments business in 2023.
Empowering women’s leadership in the workplace: 46% of our employees are women and 44% of managerial positions in the company are held by women, underscoring our commitment to empowering women and providing equal opportunities within our company.
Engaging in Sustainability Capacity Building: We run sustainability workshops to build SME capacity. For example, our recent workshop with Global Shapers Jakarta aimed to empower women F&B business owners with knowledge to make their businesses more sustainable. Over the years, we have partnered with over 10 NGOs and private organizations such as the Centre of Impact Investing and Practices (CIIP), ESGpedia, Lazada, SME Corp Malaysia, and Indonesia Global Compact Network (IGCN).
Leveraging Global partnerships for greater impact: (SDG 17) We foster partnerships for sustainable development through:
- Securing equity investments from entities such as Cool Japan Fund, Malaysia Maybank and Gobi Partners Asia, as well as credit lines from HSBC and Norfund, among others.
- Partner with NGOs and private organizations such as CIIP, ESGpedia, and IGCN to advance sustainability insights and capacity for SMEs
Join Us in Expanding Financial Horizons
As we embark on this journey, we understand that the path to meaningful financial inclusion for underserved SMEs is long and complex, requiring sustained commitment and diverse perspectives. As we continue expanding our reach and deepening our impact, we are grateful for the partners who have supported us in this journey and believed in this mission of building
