HSBC’s ASEAN Growth Fund now commits over US$100 million (RM436 million) to Funding Societies, supporting Southeast Asian MSMEs and driving financial inclusion.
Kuala Lumpur, 5 November 2024 – Funding Societies | Modalku (Funding Societies), Southeast Asia’s largest digital finance platform for micro, small, and medium enterprises (MSMEs), has announced the signing of a third credit facility with HSBC under its ASEAN Growth Fund. This latest credit facility, part of a total commitment surpassing US$100 million (RM436 million) since 2022, emphasises HSBC’s strong support for MSMEs via digital lending platforms.
This latest facility is one of HSBC’s largest asset-backed secured transactions with a digital SME lender in Southeast Asia. The collaboration aims to deepen Funding Societies’ impact by extending credit to underserved MSME segments across the region.
A credit access gap of US$2.5 trillion (RM10.9 trillion) still exists in Asia-Pacific, with MSMEs representing 99.9% of businesses, contributing between 35% and 69% of each country’s GDP.
Kelvin Teo, Co-founder and Group CEO of Funding Societies, expressed appreciation for HSBC’s continued support: “The continued support from a global bank such as HSBC is a testament to its commitment to support the development of digital platform businesses such as ours and MSMEs as we ride through a two-decade high interest rates impacting the global economy. This enables us to further explore scalable debt financing for growth and profitability, and bolster financial inclusion for the underbanked and underserved SMEs in the region.”
This transaction also aligns with the ASEAN Growth Fund’s objective to provide scalable financing solutions, empowering digital lenders like Funding Societies to pursue growth through both equity and debt financing.
As part of this agreement, HSBC will act in various capacities, including as the structuring bank, lender, and security agent, while providing a pan-regional financing solution to support Funding Societies’ regional expansion.
Harish Venkatesan, Head of Corporates and Business Banking at HSBC Singapore, highlighted HSBC’s commitment: “As an early-starter and a leading MSME digital financing player in ASEAN, we are pleased to provide our third credit facility for Funding Societies, cumulatively in excess of US$100 million (RM436 million). This will enable us to continue supporting its efforts to provide financing support to micro, small and medium enterprises which will contribute to the building blocks of societies in the ASEAN region. We look forward to continuing support for Funding Societies as they grow their business and for the underlying MSMEs in the region through the HSBC ASEAN Growth Fund.”
Launched in March 2024, the US$1 billion (RM4.4 billion) HSBC ASEAN Growth Fund aims to assist Singapore-based digital platforms that support Southeast Asia’s e-commerce sector in scaling across international markets and advancing their business portfolios. This fund complements HSBC Singapore’s New Economy and Venture Debt Fund, forming a comprehensive suite of financing solutions for businesses at different growth stages.
The announcement follows Funding Societies’ recent strategic investment from Maybank in September. Since its inception in 2015, Funding Societies has disbursed over US$4 billion (RM17.4 billion) in business financing, benefitting more than 100,000 businesses across Singapore, Indonesia, Malaysia, Thailand, and Vietnam. In the payments sector, it has processed an annualised US$1.4 billion (RM6.1 billion) in gross transaction value since its entry in late 2022.
