Funding Societies expects to finance 200 SMEs this year
KUALA LUMPUR: Modalku Ventures Sdn Bhd (Funding Societies), a Malaysian-founded regional Peer-to-Peer (P2P) financing online platform, expects to finance about 200 local small and medium enterprises (SMEs) this year with an allocation of RM20 million.
Co-Founder Kelvin Teo said the company is targeting 2,000 investors, comprising a mix of local and foreign professional investors and financial institutions.
“Besides that, we have also received interest from our existing Singapore investors, mainly from the retail sector, of which there are over 100, currently,” he added.
He told the media this after the launch of the debt crowdfunding platform to provide SMEs and investors with trusted alternative financing and investment opportunities.
Funding Societies introduced two products for this year, comprising term financing for between RM50,000-RM500,000 and a tenor period of three to 24 months, invoice financing for a quantum of RM30,000 - RM300,000 and tenor period of one to four months.
It will also introduce a third product, micro financing, in 2018.
Teo said the company, which has originated almost RM90 million in financing in Singapore and Indonesia since June 2015, would focus on four SME sectors, namely manufacturing, wholesale and retail trade, construction as well as food and beverages.
“This is because the sectors were the top contributors to the country’s Gross Domestic Product (GDP) to a large extent,” he added.
Meanwhile, Chief Executive Officer Kah Meng Wong said the company which has given out 390 loans to date, had a two per cent default rate and among the lowest in the region, while providing returns of greater than 10 per cent to investors on an overall basis.
The loan interest rates for borrowers range from nine to 18 per cent.
He also said the loan approval rates in Singapore stood at about 15 to 20 per cent, while in Indonesia it was at five to 10 per cent.
“We conduct rigorous risk assessments on SMEs before enabling them to crowdfund on our platform, but we are more lenient, faster and easier than banks.
“Banks takes an asset-based approach, while we focus more on the SME’s cash flow, to see if they have enough money to make repayments.
“To top it off, it is hassle-free as they can just apply online at our website at fundingsocieties.com. my, 24/7. The whole process is about 20 per cent faster compared with banks,” said Kah.
Funding Societies is funded by global and regional venture capital firms, Sequoia India and Alpha JWC. — Bernama