Khazanah and CGC Digital Champion Investment in Southeast Asia’s Foremost SME Digital Finance Platform
In a move that’s poised to reshape the contours of small and medium enterprise (SME) financing across Southeast Asia, Khazanah Nasional Berhad (“Khazanah”) alongside CGC Digital Sdn Bhd (“CGC Digital”) have unveiled a substantial investment in Funding Societies | Modalku (“Funding Societies”). This initiative is set to enhance the financial access for businesses traditionally sidelined by mainstream financial avenues.
Funding Societies: A Beacon for SME Financial Empowerment
At the vanguard of the FinTech revolution, Funding Societies is committed to empowering micro, small, and medium enterprises (MSMEs) with vital financial services. Since its inception, the platform has made significant strides, disbursing over US$3.5 billion across five million transactions. This has positively influenced over 100,000 businesses throughout its operational markets in Malaysia, Singapore, Indonesia, Thailand, and Vietnam.
In Malaysia, Funding Societies is on a crusade to bridge a substantial RM90 billion funding gap faced by MSMEs. As a Recognised Market Operator registered with the Securities Commission Malaysia, the company is well-poised to expand its services beyond major urban centers, aiming to support over 25,000 MSMEs across the nation by the end of 2025.
Broadening Horizons with Islamic Financing Solutions
The company is also making significant strides in broadening the scope of its Islamic financing solutions, which were introduced earlier in 2023. Since its launch, it has successfully disbursed over RM100 million in Shariah-compliant financing in Malaysia, marking a significant milestone in its commitment to offering diverse financial products.
Khazanah’s Strategic Vision and CGC Digital’s Innovative Approach
Khazanah’s investment is a key component of its Dana Impak mandate, integral to the Advancing Malaysia strategy. This move aligns with the government’s vision of enhancing MSME performance and fostering socioeconomic growth, particularly in rural and semi-urban areas with limited access to financial services.
CGC Digital, on the other hand, is set to revolutionize financial inclusion with its innovative digital guarantee products and credit scoring models designed specifically for micro and small businesses. This partnership with Funding Societies will continue to provide digital guarantee products, ensuring long-term financial access for Malaysian MSMEs.
Industry Leaders’ Perspectives
Khazanah’s Managing Director, Dato’ Amirul Feisal Wan Zahir, remarked on the investment, stating, “The investment in Funding Societies reflects our commitment to fostering financial inclusion and bridging the funding gap, especially within the MSME community. Being the backbone of Malaysia’s economy and contributing nearly half of the nation’s employment, MSMEs are both critical and critically underserved. Hence, this investment aligns with our mission of contributing to nation-building and socioeconomic growth.”
Yushida Husin, CEO of CGC Digital, shared a similar sentiment, emphasizing, “CGC Digital sees this investment as a strategic win for Malaysian MSMEs. We share Dana Impak’s vision and believe that, by working together with Khazanah, CGC Digital can advance financial inclusion among underserved and unserved MSMEs in the digital ecosystem. CGC Digital seeks to push the envelope by developing a suite of innovative digital guarantee products for thin-file MSMEs that can be offered together with Funding Societies’ financing products to increase their chance of obtaining much-needed financing.”
A Testament to Commitment and Future Growth
Kelvin Teo, Co-founder and Group CEO of Funding Societies, expressed his gratitude for the support from Khazanah and CGC Digital, viewing it as a testament to their commitment to extending credit to more underserved MSMEs. He highlighted the significant challenges faced by MSMEs in obtaining credit and how Funding Societies aims to address these issues with its extensive reach and diverse financing solutions.
Also read: Unveiling the Shadows: Surfshark’s 2023 Report Illuminates the Evolving Cybersecurity Landscape
A New Chapter for SME Financing
The strategic investment by Khazanah and CGC Digital in Funding Societies marks the dawn of a new chapter in SME financing in Southeast Asia. With a focus on financial inclusion, innovative solutions, and a commitment to addressing the unique challenges faced by MSMEs, this partnership is set to drive significant economic growth and development across the region.
