Funding Societies and CGC Unite to Revolutionize MSME Financing with Innovative Digital Supply Chain Guarantee

Singapore’s Funding Societies has partnered with Malaysia’s Credit Guarantee Corp (CGC) to introduce a pioneering digital supply chain financing guarantee for underserved micro and small enterprises (MSMEs). The collaboration aims to offer a Shariah-compliant digital credit guarantee solution, addressing financing gaps by utilizing alternative data for credit risk assessment, and potentially benefiting up to 100 deserving MSMEs with better access to financing.

4 August 2023 – Funding Societies, a leading unified digital finance platform for SMEs, has joined forces with Credit Guarantee Corp Malaysia Bhd (CGC) to revolutionize financing opportunities for micro, small, and medium enterprises (MSMEs) through the introduction of the first-ever digital supply chain financing guarantee.

Under the umbrella of this strategic partnership, Funding Societies and CGC’s fintech subsidiary, CGC Digital, have formalized a memorandum of understanding to embark on a collaborative proof of concept (POC) project. This initiative aims to foster innovation in financial products that empower underserved and unserved MSMEs, enhancing their accessibility to essential financing.

The core objective of this groundbreaking collaboration is to establish a digital credit guarantee mechanism through a Shariah-compliant digital supply chain financing (DSCF) solution. This innovative approach is tailored to cater to the specific financial requirements of Malaysian micro and small enterprises, a segment that has traditionally been underserved.

In line with this collaboration, CGC Digital is in the process of developing a novel digital credit guarantee product for CGC. This product will facilitate financing up to RM4 million as an initial offering. The DSCF solution, integrated with Funding Societies’ expertise, will enable up to 100 creditworthy micro and small enterprises to access much-needed financing. Leveraging alternative data for credit risk assessment, this initiative is poised to bridge a critical financing gap for MSMEs.

Wong Kah Meng, Group Chief Operating Officer of Funding Societies, emphasized the company’s commitment to bolstering the partnership with CGC Digital. He highlighted that CGC Digital’s innovative credit guarantee approach has the potential to reduce risk for investors and lower financing costs for MSMEs. Furthermore, Wong outlined how the combination of Funding Societies’ industry playbook and CGC Digital’s innovation would create a framework to support micro and small enterprises across various sectors including fast-moving consumer goods, agriculture, telecommunications, and wholesale and retail trade.

Yushida Husin, Chief Executive Officer of CGC Digital, underscored the significance of the Memorandum of Understanding as a testament to both entities’ shared dedication to driving innovation and fostering value creation for MSMEs. Yushida emphasized CGC Digital’s vision of providing MSMEs with an integrated digital marketplace that enhances their access to finance and targeted assistance to facilitate growth.

Yushida stated, “Through strategic collaborations within the digital ecosystem, CGC Digital is committed to accelerating the financial inclusion of MSMEs in Malaysia.” – source: NST

Author: Terry KS

Share This Post On