Funding Societies joins CGC Digital to provide digital supply chain finance to MSMEs

By Gloria Mathias

Funding Societies, a unified SME digital finance platform, has partnered with CGC Digital, the FinTech subsidiary of Credit Guarantee Corporation Malaysia Berhad (CGC).

The partnership aims to provide a digital credit guarantee through a Shariah-compliant digital supply chain financing (DSCF) solution to address better the financing needs of Malaysian micro and small enterprises, the most underserved segments.

Through the partnership, CGC Digital developed a new digital credit guarantee product for CGC that will be offered for financing up to RM4 million, benefiting up to 100 creditworthy micro and small enterprises via Funding Societies’ DSCF solutions, leveraging alternative data for MSMEs’ credit risk assessment.

Wong Kah Meng, Group Chief Operating Officer, Funding Societies | Modalku said, “Following our entry into the SME Portfolio guarantee program of CGC in April this year, we are fortifying this collaboration with CGC Digital. The digital-first approach leverages alternative data, enabling MSMEs with broader and more affordable access of MSMEs to digital guarantee and transformative financing.”

Wong added, “CGC Digital’s innovation of CGC’s credit guarantee would mitigate risk for investors and reduce the cost of financing for MSMEs. Combining it with our industry playbook for fast-moving consumer goods (FMCG), agriculture, telecommunications, and wholesale & retail trade segments, we could serve more micro and small enterprises that make up these industry segments.”

Yushida Husin, CEO of CGC Digital noted, “CGC Digital broke new ground in this collaboration with Funding Societies. This MoU signifies our mutual dedication to fostering innovation and co-creating value with MSMEs. CGC Digital seeks to provide MSMEs with a one-stop digital marketplace for better access to finance and more targeted assistance to scale up. Given this, we are committed to collaborating with like-minded strategic partners in the digital ecosystem to accelerate the financial inclusion of MSMEs in Malaysia.”

Funding Societies and CGC Digital can leverage technology and automation to risk-price more accurately and process financing efficiently, enabling right-priced trade finance products for micro and small enterprises.