CGC Digital, Funding Societies | Modalku (Funding Societies), and FarmByte signed a Memorandum of Understanding (MoU) aimed at narrowing the financing gap for Micro, Small, and Medium Enterprises (MSMEs) in the agriculture segment.
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This strategic collaboration seeks to enhance access to financing and support the growth of agricultural businesses, thereby contributing to Malaysia’s food security agenda and economic resilience.
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Addressing Food Security in Malaysia Food security remains a critical concern for Malaysia as the nation grapples with challenges such as climate change, urbanization, a growing population and reliance on imported food. Despite the importance and urgency to address food insecurity issues, MSMEs in agriculture sector face significant hurdles in securing financing to grow their businesses and to enhance productivity. Many small-scale farmers lack the necessary collateral to secure traditional loans, which further limits their access to financial resources. A gap in financial literacy among farmers also hinders their ability to navigate complex financing options effectively. Furthermore, agriculture segment is often perceived as a high-risk sector due to its vulnerability to climate change and market volatility, making financial institutions hesitant to extend credit.
Potential Impact on Local Farmers The collaboration between CGC Digital, Funding Societies, and FarmByte aims to have positive impact on local farmers. By providing innovative financing options, local farmers will have better access to the capital needed for sustainable operations and business expansion. Improved financial literacy and access to modern agricultural technologies will enhance farmers’ productivity and efficiency. Implementing risk assessment and management strategies will help farmers manage uncertainties related to climate change and market fluctuations. The focus on sustainability will ensure that farming practices are environmentally friendly and economically viable in the long term. By addressing the financial challenges faced by farmers, this collaboration will empower them to become more resilient and self-sufficient.
Yushida Husin, Chief Executive Officer of CGC Digital said, “At CGC Digital, we are deeply committed to supporting initiatives that address the critical issue of food security in Malaysia. By collaborating with Funding Societies and FarmByte, we aim to close the funding gap and enable local farmers with financial access they need to thrive. We believe that leveraging farming data as an alternative credit scoring metric will not only enhance the accuracy of credit assessments but also provide a more inclusive and supportive financial ecosystem for our agricultural MSMEs. This collaboration is a significant step towards building a resilient and sustainable agricultural sector that can meet the growing demands of our nation.”
Wong Kah Meng, Group Chief Operating Officer and Chief Executive Officer of Funding Societies Malaysia remarked, “This partnership with CGC Digital reflects our shared commitment to empowering underserved businesses across Malaysia. We strive to build a more inclusive financing ecosystem that fuels the growth of micro and small enterprises. By integrating CGC Digital’s expertise in credit enhancement with Funding Societies’ advanced digital financing platform, on the back of FarmByte’s agricultural ecosystem, we aim to empower farmers and agribusinesses with greater access to capital that they need to expand, create jobs, and drive economic progress. This collaboration not only strengthens the agricultural value chain but contributes to food security and economic resilience in Malaysia.”
According to Syed Aiman Kifli Syed Jaafar, Chief Executive Officer of FarmByte, the partnership with CGC Digital and Funding Societies aligns with the company’s vision to revolutionize farming by providing farmers with both financial and technological resources. “Our goal is to empower MSMEs in the agriculture sector with greater access to financing, enabling them to scale their businesses and enhance productivity,” he shared. “Through this collaboration, we are bridging the financial gap and equipping agropreneurs with the resources and support needed to drive a more resilient and sustainable agrofood ecosystem.”
A Collaborative Approach to Empower MSMEs Through this MoU CGC Digital, Funding Societies, and FarmByte will leverage their combined expertise to implement innovative financing solutions that address the unique needs of MSMEs in the agriculture sector. CGC Digital will play the key role of mitigating risks as a leading credit guarantee provider and enhance its probability of default model with farm-level data as an alternative risk measurement for agribusinesses, thereby de-risking lending and improve access to financing through data-driven credit evaluations. Funding Societies, will provide fast, flexible funding solutions utilizing alternative credit assessments to serve underserved farmers and agribusinesses that may lack traditional collateral. FarmByte, will contribute farm-level data and insights to enhance credit scoring models, improving risk evaluation and financial inclusion.
About FarmByte
FarmByte is pioneering a new era in Malaysia’s agrofood industry through innovative technology and data-driven solutions. As a subsidiary of Johor Corporation (JCorp), FarmByte is committed to enhancing national food security, improving production efficiency, and uplifting the livelihoods of farmers across Malaysia.
About CGC Digital
CGC Digital is a FinTech company, established as the digital arm of Credit Guarantee Corporation Malaysia Berhad. Registered in July 2022, its primary goal is to empower Micro, Small, and Medium Enterprises (MSMEs) by creating a simpler and more seamless financing experience in the digital ecosystem.
About Funding Societies | Modalku Funding Societies
Modalku is the largest unified SME digital finance platform in Southeast Asia. It is licensed in Singapore, Indonesia, Thailand, registered in Malaysia, and operates in Vietnam. The FinTech company provides US$1 billion annually of business financing to small and medium-sized enterprises (SMEs). In recent years, it has made strategic milestones including its acquisition of regional digital payments platform CardUp and co-investment into Bank Index in Indonesia.
Funding Societies | Modalku is backed by SoftBank Vision Fund 2, Maybank, Khazanah Nasional Berhad, CGC Digital (the digital arm of the Credit Guarantee Corporation Malaysia Berhad), SBVA (previously SoftBank Ventures Asia), Peak XV Partners (previously Sequoia Capital India), Alpha JWC Ventures, SMBC Bank, BRI Ventures, VNG Corporation, Rapyd Ventures, Endeavor, EBDI, SGInnovative, Qualgro, and Golden Gate Ventures among others.
It has received accolades through the years including: Brands for Good (2019, 2023), Global SME Excellence Award, Global SME Finance Awards by IFC (2021-2023) Global Startup Awards (2020), MAS FinTech Award (2016, 2021), Singapore’s Fastest-Growing Companies 2024 (a list of 100 companies compiled by The Straits Times and Statista), High-Growth Companies in Asia-Pacific 2024 (a list of 500 companies compiled by the Financial Times and Statista) .
