Funding Societies and CGC Digital Unite to Reshape Financing Landscape for Malaysian MSMEs

Funding Societies and CGC Digital have forged a pioneering partnership to revolutionize financing for underserved micro and small enterprises (MSMEs) in Malaysia. By leveraging alternative data and a digital-first approach, the collaboration aims to offer transformative financial solutions through a Shariah-compliant digital supply chain financing (DSCF) platform, enabling broader and more affordable access to credit guarantees.

9 August 2023 – Funding Societies, the leading digital finance platform for small and medium enterprises (SMEs) in Malaysia, has embarked on a groundbreaking partnership with CGC Digital, the fintech subsidiary of Credit Guarantee Corp (M) Bhd (CGC). This collaboration marks a significant milestone as Funding Societies becomes the first fintech company to partner with CGC Digital, aiming to revolutionize the landscape of financial technology (fintech) solutions in Malaysia.

The strategic partnership is centered around a shared objective: to address the critical financing needs of micro and small enterprises (MSMEs) in Malaysia, a segment that has traditionally faced challenges due to limited access to credit. By offering a Shariah-compliant digital supply chain financing (DSCF) solution, the collaboration seeks to extend essential financial support to the most underserved MSMEs in the country.

The memorandum of understanding (MoU) signed between the two entities outlines their commitment to develop a proof of concept (PoC) project and innovative products tailored to empower MSMEs with comprehensive financing options. Through this collaboration, CGC Digital has introduced a pioneering digital credit guarantee product, catering initially to financing up to RM4 million. This initiative is set to benefit up to 100 creditworthy micro and small enterprises, providing them with transformative financial solutions powered by Funding Societies’ DSCF framework.

A distinctive aspect of this partnership lies in its utilization of alternative data for the credit risk assessment of MSMEs, thereby offering a more accurate evaluation of their creditworthiness. This data-driven approach contributes to mitigating risk for investors and reducing financing costs for the MSMEs. The collaboration strategically leverages Funding Societies’ industry expertise across segments such as fast-moving consumer goods, agriculture, telecommunications, and wholesale and retail trade, further expanding its reach to address the financing requirements of a diverse range of businesses.

Wong Kah Meng, Co-founder and Group COO of Funding Societies, expressed the significance of the collaboration’s digital-first approach, which harnesses alternative data to facilitate broader and more affordable access to digital guarantees and transformative financing for MSMEs. Yushida Husin, CEO of CGC Digital, highlighted the shared commitment to fostering innovation and creating value for MSMEs, as CGC Digital aims to establish a one-stop digital marketplace to enhance financial access and support for scaling up.

The collaboration arrives on the back of previous successful initiatives, including Funding Societies’ MoU with CGC for an SME Portfolio Guarantee scheme and the launch of comprehensive Islamic financing solutions. By combining their technological prowess and automation capabilities, Funding Societies and CGC Digital are poised to usher in a new era of accessible and tailored financing solutions, effectively meeting the distinctive needs of micro and small enterprises in Malaysia’s evolving business landscape. – source: TMR

Author: Terry KS

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