Funding Societies Launches Shariah-Compliant Investment Note in Malaysia

Experience the power of Shariah-compliant investment notes, a unique financial instrument that combines ethical principles with lucrative investment opportunities. Singapore-based Funding Societies have recently launched a Shariah-compliant Guaranteed Islamic Investment Note (GN-i) in Malaysia. This comes as a sequel to its introduction of comprehensive Islamic financing solutions aimed at small and medium-sized enterprises (SMEs). The new product aims to offer investors a viable avenue for portfolio diversification through short-term, Shariah-compliant investment notes.

An Expanding Market: A Snapshot of Malaysia’s Islamic Investments

According to the Securities Commission’s 2022 Annual Report, MYR 368.13 million ($79.19 million) of a total of MYR 1.7 billion ($370 million) was raised through Shariah-compliant investments on peer-to-peer (P2P) lending, SME digital financing, and equity crowdfunding (ECF) platforms in Malaysia. This demonstrates a growing appetite for Islamic financial products in the market and the potential for further growth.

Fintech as an Enabler: Innovating in the Halal Economy

The growth in the Islamic finance sector has identified fintech players like Funding Societies as key enablers in providing innovative solutions in the halal economy and Islamic social finance. Through Shariah-compliant financial options, Funding Societies aim to contribute significantly to the development of the Islamic capital market ecosystem, aligning with the vision set by the Securities Commission.

A Milestone for Funding Societies: Diversification through Shariah-Compliant Investment

Chai Kien Poon, Country Head of Funding Societies Malaysia, expressed pride in the introduction of their first-ever Shariah-compliant guaranteed investment product. He highlighted that investors now have the opportunity to diversify their portfolios with Shariah-compliant investments, thereby contributing to closing the MYR 90 billion ($19.36 billion) SME financing gap in Malaysia.

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Empowering MSMEs: How Funding Societies Operates

As a digital finance platform for SMEs, Funding Societies supports micro, small, and medium enterprises through investment notes funded by retail, high-net-worth, and institutional investors. Payments from MSMEs, including principal and returns, are collected and distributed to investors as per the agreed schedule. Funding Societies have disbursed over MYR 2 billion ($430 million) in financing in Malaysia since 2017.

Making Finance Accessible: The GN-i Product Explained

The GN-i follows commodity murabahah principles through a Tawarruq arrangement, combined with a kafalah (guarantee) contract. In the event of an SME default, the guaranteeing entity assumes the payment obligations, thus safeguarding the investor’s capital.

Moreover, Funding Societies has set a low minimum investment amount, starting from just MYR 100 ($21.51) per note. Investors can expect guaranteed gross returns of up to 8 percent per annum. Embrace the possibilities of halal investing and secure your financial future with Shariah-compliant investment note. Start investing today and witness the rewards of responsible and ethical financial growth.