Funding Societies expands to Thailand

  • Awarded the SEC debt crowdfunding license earlier this month
  • Helps address the US$40 billion SME financing gap in Thailand

Funding Societies expands to ThailandSMALL medium enterprises-focused (SME) digital financing platform Funding Societies is now live in Thailand, after being awarded the Securities and Exchange Commission (SEC) debt crowdfunding license earlier this month. This allows the platform to support Thai SMEs and startups in raising funds from retail and institutional investors. 

Thailand marks the fourth market in Funding Society’s six years of operations. Since 2015, the company claims to have supported over 65,000 SMEs in Singapore, Malaysia, and Indonesia with over USD1.5 billion in funding.

Its entrance into Thailand allows them to address a SME financing gap of over US$40 billion, according to the International France Corporation (IFC).

“SMEs contribute over 40% of Thai GDP but face numerous challenges in accessing finance from traditional sources due to lack of collateral, onerous document requirements and lengthy approval processes,” said Varun Bhandari (pic), Funding Societies Thailand country head in a statement.

“By leveraging our proprietary technology, Funding Societies offers SMEs a new avenue for raising financing that is fast, affordable, and convenient. Thai investors will also get an opportunity to diversify their investments and earn attractive fixed income returns, while supporting local businesses and brands.”

According to Funding Societies Malaysia co-founder and chief executive officer (CEO) Wong Kah Meng, this also addresses the US$250 billion financing gap in Malaysia, Singapore, Indonesia and Thailand combined (based on IFC numbers).

“Our foray into Thailand will serve to strengthen our regional foothold in the digital financing space, as we remain steadfast in our mission to support underserved SMEs across the region. As it has in other countries, pear-to-pear (P2P) financing is expected to digitally transform the financing business and reduce funding gaps in the Thai market,” he said.

Funding Societies offers a range of collateral-free financing options including business term financing, micro financing, invoice financing, and dealer financing via a quick and seamless application process. The company said the platform has also established regional partnerships with companies such as Lazada, Carsome, CIMB Bank, and Zilingo.

Thai investors will soon be able to log on to the Funding Societies crowdfunding platform and access a range of investment opportunities. Funding Societies claimed that these opportunities offer diversification benefits, and can help enhance overall portfolio returns.

It also noted that its risk management capabilities have restricted defaults to below 2% across the region, despite the challenges brought on by the Covid-19 pandemic.

In Malaysia, Funding Societies said is has successfully disbursed more than US$160.38 million  (RM650 million) to-date with more than 60% local market share. They are also expected to disburse US$246 million (RM1 billion) cumulatively by 2021.

The local platform serves SMEs from all segments, vintages and sizes, and has 50,000 registered investors. The platform is backed by investors such as Sequoia India, Softbank Ventures Asia Corp and LINE Ventures, amongst others.

 

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