Funding Societies, a provider of Halal peer-to-peer (P2P) finance, is laying the building blocks toward becoming a neobank to better capture and serve the MSME market.
“We started off with providing access to financing for businesses but over time, we have expanded the scope to provide other financial services to businesses. One thing we realized from our interaction with SMEs is that while financing is one of their key pain points, there are also other critical pain points that they face when doing business,” explained Chai Kien Poon, the Malaysian country head for Singapore-headquartered Funding Societies, to IFN.
Among the challenges faced by SMEs include difficulty in managing payments and transactions as well as access to SME-friendly banking accounts, remittance and other services. Chai confirmed these are the areas the company will be venturing into over the next one to two years.
In fact, at the group level, the firm has already started making its move toward diversifying its services. In June, Funding Societies revealed that it is acquiring regional payments solution CardUp, for an undisclosed amount. Pending regulatory approval, the acquisition would allow the SME digital financing platform to absorb CardUp’s payment capabilities including card payments to non-card- accepting recipients, online payments acceptance and invoice automation tools.
Earlier in April, Funding Societies, also known as Modalku in Indonesia, announced that it co-invested in an Indonesian bank, alongside Carro, a Singapore-based automotive marketplace platform.
The company entered the Islamic finance space this year with its Islamic trade finance scheme. It is learned that it is working on securing approval to offer a wider range of Shariah instruments including term-financing and microfinance for businesses.
“The plan is to have a Shariah compliant proposition across our current product lineup,” said Chai.
This is an excerpt of an interview with Chai Kien Poon, the Malaysian country head of Funding Societies. To hear the full discussion, log on to IFN OnAir.