Image credit: NST
KUALA LUMPUR: Axiata Group Bhd's unit Boost, which has evolved from a simple ewallet in 2017 to become a full-spectrum fintech company, will pave the way for greater financial inclusion in Southeast Asia with its holistic ecosystem.
It wants to provide micro-financing solutions to empower thousands of local micro, small, and medium enterprises (MSMEs), Boost Credit deputy chief executive officer Fozia Amanulla said.
Boost has been able to offer digital financial solutions at scale, catering to the underserved market in Malaysia and Indonesia through tits AI-based micro-financing business.
The company now has a merchant solutions platform to help merchants go digital, with over 600,000 merchant touch points currently across Malaysia and Indonesia.
It also has a cross border payment platform with over 100 global digital partners including Apple App Store, Spotify, Netflix and Google Play.
In combination with the recent announcement of the digital banking licence by Bank Negara Malaysia to the Boost-RHB Bank Bhd consortium, this fulfils the company's ambition to be a full spectrum financial solutions provider to micro-financing specifically the underserved segments.
"We believe that we have actually empowered thousands of micro-SMEs by providing them digital micro-financing solutions, and all micro-financing solutions are provided based on our AI scoring model for businesses.
"I believe that really differentiates us from the other players, or the traditional players, in the market because having the ability to score out customers and having the ability to predict their repayment behaviour gives us the access to providing this financing segment," said Fozia.
Since its inception, Boost has disbursed over RM3 billion worth of loans in Malaysia and Indonesia.
The company has witnessed an increase of over 70 per cent year-on-year in loans disbursed across the two countries.
More than 40 per cent of Boost's customers had never received credit from other financial service providers before, Fozia said.
Boost's commitment to serving the underserved extends beyond micro-financing, she added.
The company introduced a referral program called Kongsi Klub, enabling anyone to become a referrer for small business owners seeking financing.
Launched during the height of the pandemic in 2020, Kongsi Klub has recently been revamped to provide more opportunities for referrers, including financial growth and access to cash.
"The objective (of Kongsi Klub) was twofold - one was to get MSMEs to apply for financing at times where they found it really difficult for them to get financing. The other objective was to give the ability to our customers to earn a referral fee when referring customers to us," Fozia said.
Todate,there are about 4,000 registered members under Kongsi Klub, and the active members managed to bring in over 50,000 referrals, amounting to more than RM10 million in capital loan disbursement last year.
This year, it is targeting 10 times more, in line with its enhanced structure.
Fozia said challenges faced by MSMEs in accessing financial aid from traditional financial institutions include high interest rates, excessive documentation requirements, lengthy application processes, complicated loan structures and poor services from financial institutions.
These have hindered the growth of small businesses.
Studies show that 87 per cent of MSMEs in Malaysia encounter issues with banks regarding financing and loans.
For MSMEs, micro-financing provides immediate access to funds and increased capital, allowing them to navigate economic challenges while expanding their operations.
Micro-financing also facilitates better loan repayment rates, enabling businesses to secure future investments and fostering continuous growth.
Moreover, it strengthens business resilience by providing a financial buffer against unforeseen circumstances, while contributing to the social and economic well-being of communities.
Source: https://www.nst.com.my/business/2023/07/932510/boost-expands-financial-access-underserved-businesses