Funding Societies, a Southeast Asian SME finance provider, has gained a USD $50 million credit facility from HSBC Singapore. The additional capital will be utilized to provide financing to underserved SMEs in the region.
Funding Societies reports that commercial lending in Asia Pacific is expected to grow at a CAGR of 16.5%, generating a revenue of more than US$7 trillion by 2028. The company believes that SMEs are still frequently underserved, especially when it comes to accessing financing online. Funding Societies claims loan disbursement of more than USD $2.6 billion through more than 5.1 million transactions across the region. The new credit will be channeled via its range of SME financing solutions across all its five markets.
Kelvin Teo, co-founder and Group CEO of Funding Societies | Modalku, said they are honoured to receive such a sizeable facility from a bank like HSBC.
“This marks a critical milestone for us and is a testament to our credit track record through Covid-19. HSBC’s foresight, global capabilities and scalable approach further equips us to better satisfy the underserved SME segments in the region. We appreciate HSBC’s confidence in us and are excited about this signing.”
SMEs are of key economic importance making up 97% of all enterprises in Southeast Asia. These firms drive approximately 40% of GDP value across the region.
Funding Societies states that in Singapore, the Department of Statistics released in its 2021 report showing that 99% of enterprises are SMEs – which contributed to 44% of the nominal value added at approximately S$212 billion.
Additionally, HSBC will act as the structuring bank, lender, facility and security agent in providing a flexible, scalable and pan-regional financing solution to support Funding Societies’ business expansion in the region.
Regina Lee, Head of Commercial Banking, HSBC Singapore, said that Funding Societies is playing an important role in contributing to Southeast Asia’s economic growth by driving broader financial inclusion and supporting homegrown companies which. She said they are thrilled to support Funding Societies as they expand their reach to serving underserved SMEs.
This announcement follows Funding Societies’ acquisition of regional digital payments platform CardUp as part of an effort to diversify its services beyond lending.
Funding Societies | Modalku is licensed and registered in Singapore, Indonesia, Thailand, Malaysia, and operates in Vietnam. Funding Societies is a marketplace lender working with both institutional and individual investors. Its overall default rate stands at 1.29%. The vast majority of loans of filled in less than five days.