Survey reveals 72 pct of MSMEs in SEA sees boosted revenue with digital financing
KUALA LUMPUR: A survey by Funding Societies showed that 72 per cent of micro, small and medium-sized enterprises (MSMEs) in Southeast Asia said their revenues would decrease if not for the fintech’s business financing.
To mark half a decade of the FinTech’s lending, Funding Societies’ 2020 survey measures the social and economic impact of its funding to Funding Societies-linked MSMEs in 2018 and 2019 across Singapore, Indonesia, and Malaysia. It said, 72 per cent of the respondents said their revenues would decrease if not for the FinTech’s business financing.
In its six years of operations, Funding Societies has financed over US$1.8 billion through more than 4.8 million loans to nearly 100,000 MSMEs in the region.
Applying the Multi-Regional Input Output global value chain (MRIO-GVC) method of estimating sectoral contribution, which is pioneered by the Asian Development Bank, the study also employs data collected from Funding Societies’ internal systems and user research to measure the borrower’s impact. Sector, revenue, expense, depreciation, and employee numbers are among the data points factored into the programme that creates the output of Funding Societies’ survey.
It noted that 84 per cent of the surveyed small businesses had used the fintech’s financing as working capital to pay for overheads, inventory, and business equipment, which were all crucial in their efforts to sustain operations.
The SME borrower obtains financing from US$500 up to US$1.5 million, which can be disbursed in as fast as 24 hours, answering in a timely manner to SMEs who face the pertinent challenge of accessing business funds.
According to a survey conducted by Ernst & Young, 16 per cent of SMEs are open to exploring other financial providers including non-banks, and 68 per cent said they are open to non-traditional lenders as the core appeal is a much faster loan approval process.
Blackrock’s 2020 Global Sustainable Investing Survey revealed that 54 per cent of its global respondents consider sustainable investing to be fundamental to investment processes and outcomes, and 57 per cent of APAC respondents stated that sustainable investing is already – or will become – central to their investment strategies.