Funding Societies, Southeast Asia’s largest SME digital financing platform, announced that it has achieved S$2 billion in disbursals of business financing to small and medium sized enterprises across the region. This milestone comes as the platform enters its sixth year of operations.
Funding Societies said that the sum is partly crowdfunded by over 200,000 retail investors on its platform and has been disbursed through more than 3.7 million loans.
The firm recorded S$ 850 million in disbursals in 2020, while its general stage default rate stayed under 2% through the pandemic.
In a measure to mitigate its portfolio risk in 2020, Funding Societies tightened its credit underwriting criteria to ensure only quality notes were crowdfunded, and focused on enterprises that were likely to thrive during the pandemic.
These priority sectors included healthcare, medical supplies, and transportation to give some examples. Funding Societies saw an 18% growth in platform investors from January of 2020.
As indicated by Ernst and Young’s 2020 ASEAN SME Transformation Survey, 68% of the surveyed 1,200 SMEs across the six largest ASEAN countries – Singapore, Indonesia, Malaysia, Thailand, the Philippines, and Vietnam – are open to non-traditional lenders.
The core appeals are speed and convenience; SMEs prefer the much faster and flexible loan approval process as well as an electronic know-your-customer (KYC) procedure, which typically do not require asset security or a visit to the bank.
The Asian Development Bank estimates an annual trade financing gap of US$150 billion in Asia, and 60% of companies rejected for trade financing didn’t proceed with the trade because of the lack of funding.
Kelvin Teo, Co-founder and Group CEO of Funding Societies, said, “We’re thrilled to reach this major milestone before we even realised it. It is a momentous occasion and encouragement for us. There is much more to do, as we continue to serve the needs of SMEs and Investors in the region.”