Funding Societies raises over THB 1 Billion in debt funding from institutional investors to bridge credit gap for SMEs in Thailand and Southeast Asia

Wednesday 27 September 2023 10:33
First such debt transaction from all institutional investors with a SME FinTech lender in SEA
Funding Societies raises over THB 1 Billion in debt funding from institutional investors to bridge credit gap for SMEs in Thailand and Southeast Asia

Funding Societies | Modalku, the largest unified SME digital finance platform in Southeast Asia, announced it has successfully raised debt over THB 1 Billion (US$27 million)  led by Asia-focused private credit financier AlteriQ Global, multi-family office Aument Capital Partners (ACP), and sustainability-focused fund Orange Bloom. The funds will be channeled via Funding Societies' broad range of tailored financing solutions to support the underserved SME segments in the five markets it operates in, which include Thailand, Singapore, Malaysia, Indonesia, and Vietnam.

SMEs form the backbone of the economies in Southeast Asia. In the ASEAN region, there are more than 70 million businesses that are categorized as MSMEs (micro, small and medium enterprises), accounting 99% of total establishments and contributing to 44.8% of the region's Gross Domestic Product (GDP). Despite reports of increased access to credit for consumers, 39 million MSMEs in the region still face challenges to financing, according to the United Nations Capital Development Fund, this gap amounts up to US$300 billion. Funding Societies consistently continues to expand the range of access to its services through this funding, while supporting SMEs to maintain their business cash flow.

Co-Founder and Group CEO of Funding Societies | Modalku, Kelvin Teo, said, "We're delighted  to receive this debt funding from such a diverse group of institutional investors, who believe in the mission and growth story of Southeast Asia SMEs. Amidst uncertain macroeconomic conditions, we continue to deepen our financing propositions across our five markets for more underserved SMEs, with existing and new partners."

This debt fundraise will only further grow Funding Societies' breadth of bridging the gap in financing to the SMEs it serves in Southeast Asia. In its mission and commitment to giving a fair opportunity for these businesses, the company has begun offering solutions beyond lending, such as payments and collections - with the ambition of solving cash flow management challenges for SMEs. Funding Societies has achieved over THB 100 billion in business financing, processing more than 5 million transactions; serving about 100,000 SMEs across the region.

Managing Partner of AlteriQ Global, Zhi Yong Heng said, "We found great synergy and potential with what Funding Societies has accomplished through the years with its diverse digital financing solutions, the quality of their team and the many SMEs they have served. As one of the leading players in the digital financing space, this ties in very well with how AlteriQ Global strives to foster and provide a fully-integrated financing ecosystem. We look forward to supporting and collaborating with Funding Societies as they continue to grow in the region."

With a strong focus on personalised and holistic financial strategies, ACP serves as a family office for its high-net-worth client, ensuring the preservation and growth of generational wealth. Having known Funding Societies since its inception, ACP sees the company as a core partner in providing credit access to SMEs in the region - which would continue to be the case through its private debt vehicle for its family office clients.

On the other hand, Orange Bloom's business is heading in a direction to broaden its scope and has transitioned to being a champion of sustainable causes. Its newly set-up Sustainability Fund is aimed at providing financial support to businesses (mainly SMEs) and individuals to counter climate change, transition to more sustainable practices towards a low-carbon economy. 

This synergises with how Funding Societies has started implementing its Environmental and Social Management System (ESMS) since early this year across all its markets. It is an ESG (environment, social, governance) risk assessment framework designed with the technical assistance by the Dutch Good Growth Fund as part of the credit assessment part of the loan application process by an SME.

Source: Funding Societies Thailand