Friday, 19 April 2024

Funding Societies, HSBC sign $50 million credit facility for SMEs

5 min read

Funding Societies, Southeast Asia’s largest small and medium enterprise (SME) digital financing platform signed a $50 million credit facility with HSBC Singapore to continue expanding its reach to serve the underserved SMEs in the region.

Commercial lending in Asia Pacific is projected to grow at a compound annual growth rate (CAGR) of 16.5%, generating a revenue of more than $7 trillion by 2028, which makes up about 25% of the global market size of $27.4 trillion. Generally, the digital experience for SMEs is still particularly underserved and is not at the same pace of digital transformation as with retail lending. Funding Societies has a track record of loan disbursement of more than $2.6 billion through more than 5.1 million transactions across the region. Through this new facility, the fintech lender will be able to channel the funds via its range of tailored financing solutions across SME segments in all of its five markets.

Kelvin Teo, co-founder and Group CEO of Funding Societies | Modalku said, “We’re honoured to receive a sizeable facility from a global bank such as 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 equip 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 make up 97% of all enterprises in Southeast Asia bringing 40% of gross domestic product (GDP) value across the region. In Singapore, the Department of Statistics released in its 2021 report that 99% of enterprises are SMEs, contributing to 44% of the nominal value added at approximately SGD 212 billion ($151.7 billion). The signing will enable HSBC to extend its global capabilities by tapping into the underserved segments across the region. Furthermore, 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, “As a leading SME digital financing platform, Funding Societies is playing an important role in contributing to Southeast Asia’s new economic growth by driving broader financial inclusion and supporting homegrown companies which are the building blocks of these economies. We are thrilled to support Funding Societies as they expand their reach to serving underserved SMEs in the region”.

This announcement comes at the heels of Funding Societies’ most recent acquisition of regional digital payments platform CardUp, as part of a series of efforts to diversify its services beyond lending. The digital financing platform also achieved several strategic milestones including its Series C+ equity raise of $144 million in February, its recent investment into Bank Index in Indonesia, and market entry into Vietnam, its fifth market.

Re-disseminated by The Asian Banker

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