Fintech platform Funding Societies raises $18m in debt

Funding Societies, the largest SME digital financing platform in Southeast Asia, announced that it has raised $18 million in debt from Japanese and Singaporean investors.

The financing was backed by a trio syndicate of financial institutions including Helicap Investments, the newly launched Social Impact Debt Fund, and a Japanese financial services group.

The firm said it is on track to raise $120 million in institutional debt for funding the growth needs of micro, small, and medium enterprises in Southeast Asia.

The funding round, according to Funding Societies, also expands its platform’s institutional lender base, which it secured after passing financial and risk due diligence conducted by the lenders.

The fintech firm will place the funds for lending to deserving MSMEs, propelling its mission of enabling financial inclusion in the region, as per the announcement.

Established in 2015, Funding Societies provides MSMEs with business financing, which is funded largely by institutional lenders and retail investors.

It harnesses the power of technology to give underserved yet creditworthy MSMEs financial access through its digital platform.

In Southeast Asia, MSMEs contribute to more than 50% of each ASEAN Member State’s GDP, but because many lack a strong credit track record or collateral, they are often rejected for business loans by traditional financial institutions.

Funding Societies enables access to finance by using alternative data points including but not limited to the MSME’s cash flow – its ability to repay the loan – to underwrite these loans.

“The pandemic was an important test of resilience, and we are glad to have navigated it successfully, with a proven AI-led credit model. We are honored for the faith of Helicap, the Social Impact Debt Fund, and the Japanese financial services group, enabling us to further ride on the growth of SME digital financing,” said Kelvin Teo, Co-founder and Group CEO, Funding Societies.

The syndicated facility of US$18 million is expected to increase further with interest from investors across Asia and Europe.