HSBC eyes Asean growth, allocates US$1 bil to scale up digital platform businesses in the region

• Fund lends to companies scaling up through digital platforms in Southeast Asia
• Introduced venture debt in S’pore with US$150M earmarked for high-growth firms

HSBC has announced a US$1 billion (RM4.7 billion) Asean Growth Fund to help scale up platform players in the region’s booming digital economy. 

In a statement, the bank said, Southeast Asia’s digital economy is among the world’s fastest-growing” worth US$218 billion (RM1 trillion) in 2023 and expected to reach US$600 billion (RM2.8 trillion) by the end of the decade, at a compound annual growth rate of 16%.

[RM1 = US$0.21]

Therefore, to help the region’s digital platform players achieve economies of scale, grow their asset portfolios, and advance along the corporate lifecycle, HSBC is announcing a dedicated lending fund worth US$1 billion. 

Amanda Murphy (pic), head of Commercial Banking for South and Southeast Asia at HSBC said, like so many other internationally minded businesses, the bank is excited about Asean’s booming digital economy.

“With a working population that is digitally native, increasing in size, and poised to

consume more goods and services, especially on e-commerce, Asean has so much potential for growth. We are delighted to launch our Asean Growth Fund and work with digital companies as they expand in the region and beyond,” she added.

The HSBC Asean Growth Fund provides lending to companies that are scaling up through digital platforms across Southeast Asia. It supports new-economy names, more established corporates, and non-bank financial institutions by assessing operating metrics tied to their cash flow-generative asset portfolio, rather than relying solely on traditional financial metrics.

Separately, the bank is introducing venture debt to the Singapore market, earmarking US$150 million to provide financing to scaling, high-growth companies in Singapore that are backed by venture capital or private-equity investors.

Murphy continues, “HSBC has a proud history and strong heritage in Asean of supporting entrepreneurs and scaling up businesses. The introduction of our latest offerings allows us to better support new-economy companies in Asean, whether they are start-ups or scale-ups, as they expand across the region and advance along the corporate lifecycle.”

HSBC recently surveyed 600 companies operating in Southeast Asia and found that “digitalising operations” is the top business priority, selected by 42% of the respondents. This is followed by “growth in Southeast Asia” (40%) and “research and development” (37%).

To help capture growth in the booming digital economy, nearly two in three respondents (65%) plan to increase their investment in the digitalisation of their businesses, second only to “expanding into new markets within Southeast Asia” (66%).

According to Murphy, “Rapid digital adoption in ASEAN means businesses increasingly and understandably need fuss-free digital banking to support their growth. “They want convenient and simple-to-use trade and payment solutions that would free up more time for them to focus on strategy and expansion,” she added.