Fintech collaborations to overcome financial exclusion of MSMEs

  • Collaborates with Fave via its Fave for Growth Malaysia to target offline retailers
  • Partners Avana, the e-commerce enabler in the space of social commerce in Malaysia


Fintech collaborations to overcome financial exclusion of MSMEs


MICRO, small and medium enterprises (MSMEs) are a crucial pillar of Malaysia’s economy, making up 98.5% of the almost one million business establishments in the nation. However, despite a vibrant local SME ecosystem, poor access to capital and financing has hindered these businesses’ ability to flourish and reach greater heights.

A survey conducted by Bank Negara Malaysia in 2018 revealed that financing barriers faced by MSMEs mainly concern the aspects of documentation, costs and business viability.

Simultaneously, the advent of financial technology (fintech) is now transforming Malaysia’s financial services landscape. This includes the rise of digital services such as digital investment managers, e-wallets and digital financing platforms such as peer-to-peer (P2P) financing.

As traditional financial institutions continue to under-serve MSMEs, P2P financing will become an increasingly important financing avenue for MSMEs to support their growth.

How P2P financing fits into the picture

Thanks to strategic collaborations between digital service providers and platforms, micro financing is now made easier and more possible.

Commenting on this, Funding Societies Malaysia co-founder and chief executive officer Wong Kah Meng (pic), said, “Micro and small businesses play an integral role in Malaysia’s economic growth but are often left out in terms of access to financing. In addition, these businesses are increasingly going digital but traditional financing avenues have not kept pace to remain relevant.

“Through collaboration with digital platforms, such as e-commerce marketplaces or other digital service providers, these businesses are now able to obtain tailor-made financing products to address their cash flow needs. These collaborations will also help to significantly simplify and speed up the process for obtaining financing whilst ensuring that risk is well managed.”

Funding Societies Malaysia, the first and largest P2P financing platform in Malaysia with over 50% market share, has recently announced its collaboration with Fave via its Fave for Growth Malaysia, which aims to help offline retailers in Malaysia to embrace digital services including payments, marketing and financing.

It is also partnering with Avana, the e-commerce enabler in the space of social commerce in Malaysia, to offer financing to Avana’s customers.

Wong added, “Digital platforms, in particular, have started to capitalise on the opportunities brought about by the rise of digital commerce. To this end, we have formed strategic alliances with e-commerce platforms such as Fave and Avana to provide more financing opportunities to online businesses, which majority of them being micro and small businesses.

“Our financing product, FS Bolt,  aimed at these businesses (MSMEs), designed to be simple and easy for all users from the digitally savvy to the tech averse – where applicants can obtain financing sums of up to RM50,000 in as quick as 24 hours with only two minutes of application process, without the need for collateral.

“This product uses transactional data instead of financial reports and collateral requirements for credit approval, therefore enabling MSMEs to obtain financing via a seamless procedure with minimal documentation requirements.”

As part of their efforts to close the significant SME financing gap, Funding Societies has disbursed close to RM2 billion in Southeast Asia across more than 500,000 SME notes, whilst maintaining a 1% default rate as of June 2019.


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