Funding Societies, a leading Singapore-based digital finance platform, has reached a significant milestone by disbursing MYR 300 million ($64.22 million) in Islamic business financing to over 2,500 micro, small, and medium enterprises (MSMEs) in Malaysia. Since launching its suite of Islamic products in June 2023, the company has demonstrated its strong commitment to empowering and growing MSMEs in Malaysia. This achievement highlights Funding Societies’ dedication to providing essential financial support to small businesses, helping them thrive in a competitive market.
A Milestone in Islamic Financing of MSMEs Malaysia
In a statement released on Tuesday, Funding Societies highlighted that this milestone was achieved through the issuance of 8,000 Islamic investment notes. This accomplishment demonstrates the increasing demand for Shariah-compliant financial products among MSMEs in Malaysia. The firm’s commitment to providing Islamic financing solutions is crucial in narrowing the RM290 billion micro-SME financing gap identified by PwC for Securities Commission Malaysia.
Chai Kien Poon, Country Head of Funding Societies Malaysia, expressed his pride in the team’s achievement. “We are proud of the team for reaching another milestone, surpassing the RM300 million disbursement mark in just one year and providing access to financing for more than 2,500 MSMEs, well ahead of our targets,” he said. “This underscores the interest and demand for both Islamic financing and investment products.”
Growth of Islamic Financing Portfolio
Currently, Islamic financing constitutes 15 percent of Funding Societies’ portfolio. The company aims to increase this to 50 percent by 2025. The rising demand for Islamic financing solutions is a testament to the robust growth of the Islamic finance sector in Malaysia. According to the Global Islamic Fintech Report 2023/24 by Dinar Standard, the Islamic fintech market is set to grow significantly, surpassing the broader fintech sector. Malaysia and Indonesia have emerged as Islamic fintech hubs, reflecting strong transaction volumes and market potential.
Economic Impact and Future Outlook
Amid rising inflation and operational costs, SMEs remain pivotal to Malaysia’s projected 4 percent to 5 percent gross domestic product (GDP) growth in 2024. Funding Societies emphasized the critical need for ongoing financial support to foster the growth of MSMEs, create jobs, and enhance economic contributions. The State of the Global Islamic Economy Report 2023 also highlighted that the halal economy, valued at $6.25 trillion as of 2022, continues to expand, with Malaysia leading in global rankings since 2012. This presents significant opportunities for Malaysian MSMEs to leverage digital Islamic financing solutions to support their growth initiatives.
As Funding Societies continues to expand across its five key markets in Southeast Asia, the company remains focused on supporting underserved SMEs through its extensive range of short-term financing solutions. The firm aims to forge new industry partnerships to expand its outreach to underserved yet creditworthy SMEs. Collaborations between financial institutions, fintechs, and corporates are key to advancing the Malaysian economy.
Funding Societies | Modalku is the largest unified SME digital finance platform in Southeast Asia. The company is registered with the Securities Commission Malaysia (SC) and is licensed in Singapore, Indonesia, and Thailand, operating in Vietnam as well. Backed by prominent investors such as Khazanah Nasional, SoftBank Vision Fund 2, SoftBank Ventures Asia, Sequoia Capital India, Alpha JWC Ventures, SMBC Bank, Samsung Ventures, BRI Ventures, Endeavor, SGInnovate, Qualgro, Golden Gate Ventures, and Penjana Kapital, among others, Funding Societies provides business financing to MSMEs funded by individual and institutional investors.
Funding Societies’ milestone of disbursing $64.22 million in Islamic financing to MSMEs in Malaysia showcases its dedication to supporting small businesses and fostering economic growth. As the company plans to expand its Islamic financing portfolio and establish new industry partnerships, it is well-positioned to continue playing a crucial role in the development and success of MSMEs in Malaysia and the broader Southeast Asian region. By empowering small businesses with essential financial resources, Funding Societies is driving innovation, job creation, and sustainable economic progress.
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