Small and medium enterprises (SMEs) can seek an alternative channel to finance their working capital following the strategic partnership between Funding Societies and Money Match.
The two financial technology (fintech) start-ups said their strategic partnership aims to broaden access to alternative financial services for SMEs in the country.
Funding Societies will act as the financing platform while Money Match will become the cross-border money transfer platform.
The companies in a joint statement said based on estimates by the Securities Commission Malaysia (SC), the local SMEs have a financing gap of more than RM80 billion, and market- based financing options like Funding Societies can provide alternative solutions to address the problem.
“The collaboration aims to provide businesses, particularly SMEs, with a wider range of options when searching for quality business financing and when performing cross-border transactions,” the companies said.
The cross-border transactions include purchases of raw materials or inventory where SMEs can utilise the joint fintech solutions.
“The SME can obtain working capital financing with no collateral requirements from Funding Societies to fund the purchase, while also executing remittance payments with lower fees and better exchange rates through Money Match,” the companies said.
The partnership, they said, is also in line with the government’s initiative to digitise financial solutions.
The statement said Funding Societies will connect investors and SMEs through an online marketplace, and added that investors for SMEs could earn up to 14% in returns per annum.
“Meanwhile, SMEs could obtain up to RM500,000 in working capital financing to expand their business through a fast and simple online-based process.
“SMEs do not need to provide collateral as part of the financing requirements, while interest costs are minimised due to short financing tenures,” the companies said in the statement.
Both Funding Societies and Money Match are regulated by the central bank and the SC.
Funding Societies, the largest peerto- peer platform in South-East Asia, has operations in Singapore and Indonesia. It has disbursed over RM300 million in working capital to SMEs.
Money Match, since its launch in October 2017, has processed transactions totalling up to RM38 million.
The SC in November had announced that six approved platform operators were registered with them.
They were B2B Finpal Sdn Bhd, EthisKapital.com, FundedByMe Malaysia, Managepay Services Sdn Bhd and Peoplender Sdn Bhd.