Funding Societies crosses S$2B in SME Lending

Photo by RODNAE Productions

Funding Societies, a SME digital financing platform, announced that it has achieved S$2 billion in disbursals of business financing to small and medium sized enterprises across the region. This milestone comes as the platform enters its sixth year of operations.

The amount is partly crowdfunded by over 200,000 retail investors on its platform and has been disbursed through more than 3.7 million loans. As a result, more than 65,000 SMEs through Singapore, Malaysia, and Indonesia have received access to funding from the FinTech that they are otherwise unable to receive from traditional financial institutions.

Funding Societies recorded S$850 million in disbursals in 2020 alone, while its overall platform default rate remained under 2% through the pandemic.

Digital financing platforms like Funding Societies provide quick, short-term financing to SMEs who are looking for customisable repayment schedules. According to Ernst & Young’s 2020 ASEAN SME Transformation Survey, 68% of the surveyed 1,200 SMEs across the six largest ASEAN countries – Singapore, Indonesia, Malaysia, Thailand, the Philippines, and Vietnam – are open to non-traditional lenders.

The core appeals are speed and convenience; SMEs prefer the much faster and flexible loan approval process as well as an electronic know-your-customer (KYC) procedure, which typically do not require asset security or a visit to the bank branch.

Based on Funding Societies’ 2019 regional Impact study, which surveyed the FinTech’s impact on Singapore’s, Malaysia’s, and Indonesia’s economies, 72% of the respondents said their revenues would decrease if not for Funding Societies’ business financing. 84% of the surveyed small businesses had used the financing as working capital to pay for overheads, inventory, and business equipment, which were all crucial in their efforts to sustain operations.

The Asian Development Bank estimates an annual trade financing gap of US$150 billion in Asia, and 60% of companies rejected for trade financing did not proceed with the trade because of the lack of funding.