Signing Of US$50 million Credit Facility To Drive SME Growth In Southeast Asia

DigitalCFO Newsroom | 22 August 2022

Southeast Asia’s largest Small and Medium Enterprises (SME) digital financing platform, today announced the signing of a US$50 million credit facility with HSBC Singapore.

Funding Societies, Southeast Asia’s largest Small and Medium Enterprises (SME) digital financing platform, today announced the signing of a US$50 million credit facility* with HSBC Singapore to continue expanding the firm’s reach to serving underserved SMEs in the region.

Commercial lending in Asia Pacific is projected to grow at a CAGR of 16.5%, generating a revenue of more than US$7 trillion by 2028 – which makes up about 25% of the global market size of US$27.4 trillion. Generally, the digital experience for SMEs is still particularly underserved and is not at the same pace of digital transformation as with retail lending. Funding Societies has a track record of loan disbursement of over more than US$2.6 billion through more than 5.1 million transactions across the region. Through this new facility the fintech lender will be able to channel the funds via its range of tailored financing solutions across SME segments across all its five markets.

Co-founder and Group CEO of Funding Societies | Modalku, Kelvin Teo, said, “We’re honoured to receive such a sizeable facility from a global bank such as HSBC. This marks a critical milestone for us and is a testament to our credit track record through Covid-19. HSBC’s foresight, global capabilities and scalable approach further equips us to better satisfy the underserved SME segments in the region. We appreciate HSBC’s confidence in us and are excited about this signing.” 

SMEs make up 97% of all enterprises in Southeast Asia bringing 40% of GDP value across the region. In Singapore, the Department of Statistics released in its 2021 report that 99% of enterprises are SMEs – which contributed to 44% of the nominal value added at approximately S$212 billion. The signing will enable HSBC to extend its global capabilities by tapping on the underserved segments across the region. Furthermore, HSBC will act as the structuring bank, lender, facility and security agent in providing a flexible, scalable and pan-regional financing solution to support Funding Societies’ business expansion in the region.

Regina Lee, Head of Commercial Banking, HSBC Singapore, said, “As a leading SME digital financing platform, Funding Societies is playing an important role in contributing to Southeast Asia’s new economic growth by driving broader financial inclusion and supporting homegrown companies which are the building blocks of these economies. We are thrilled to support Funding Societies as they expand their reach to serving underserved SMEs in the region.”

This announcement comes at the heels of Funding Societies’ most recent acquisition of regional digital payments platform CardUp (subject to regulatory approvals), as part of a series of efforts to diversify its services beyond lending. The digital financing platform also achieved several strategic milestones including its Series C+ equity raise of US$144 million in February, its recent investment into Bank Index in Indonesia, and market entry into Vietnam – its fifth market.