Funding Societies crosses S$2 billion in SME lending

By Edil Corneille

Today, Funding Societies, a Southeast Asian 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. This has resulted in 65,000+ SMEs belonging to Singapore, Malaysia, and Indonesia, receiving funding from the FinTech that otherwise would have been unable to receive the funding 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 COVID-19 pandemic.

Digital financing platforms like Funding Societies provide quick, short-term financing to SMEs who are looking for customisable repayment schedules. The core appeals are speed and convenience where SMEs prefer the much faster and flexible loan approval process as well as an electronic know-your-customer (KYC) procedure, which typically does 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.

Kelvin Teo, Co-founder and Group CEO of Funding Societies, said, “We’re thrilled to reach this major milestone before we even realised it. It is a momentous occasion and encouragement for us. There is much more to do, as we continue to serve the needs of SMEs and Investors in the region.” Funding Societies recently launched in Thailand, its fourth market.

In a measure to mitigate its portfolio risk in 2020, Funding Societies tightened its credit underwriting criteria to ensure only quality notes were crowdfunded and focused on enterprises that were likely to thrive during the pandemic. These priority sectors included healthcare, medical supplies, and transportation to name a few. The FinTech saw an 18% growth in platform investors from January of 2020.

“We’re grateful to raise Series C funding last year, enabling us to further help SMEs even amidst uncertain times,” Teo continued.